Thank you very much for the question.
These amendment will create a new federal framework for defined contribution plans and pooled registered pension plans to offer this new decumulation vehicle or drawdown in retirement called variable payment life annuities. Currently, unlike a defined benefit plan, which provides a lifetime retirement income, defined contribution plans and pooled registered pension plans, or PRPPs, provide a lump sum at retirement.
Individuals are required to manage their savings throughout their retirement and manage the risk of outliving them. A variable payment life annuity will allow individuals to take their lump sum at retirement and enter into this VPLA fund, which will be part of the larger pension plan, and then receive lifetime payments from the fund. The payments will be adjusted for investment returns and the life expectancies of the other participants.
In this way, it's going to strengthen retirement security for these individuals because now they'll have this lifetime stream of retirement income.