Stats Canada published an interesting study on Pensions in 2014, entitled, “Pension plans in Canada, as of January 1, 2014 “, and in it was the great news that more Canadians (total) have pensions (from 2012 to 2013). (Remember I did ask Do you have a Pension?)
Looking at all sectors and all types of pensions, 169 more Canadians had Pensions from 2012 to 2013 (no, that is not in hundreds of thousands or thousands, it is 169). For all intent and purpose, there was the same number of folks with pensions. However, the types of pensions that they have has changed a fair amount.
- 20,868 fewer folks in Defined Benefit Pension Plans
- 6,428 more folks in Defined Contribution Plans
- 14,609 more folks in Hybrid Pension Plans, where Hybrid means, “Other plans include plans having a hybrid, composite, defined benefit / defined contribution or other component.“
So what does this really mean? I think the idea of the work-related pension is changing (some might say becoming extinct, but maybe not just yet), and most folks (the next generation after me) are going to have to take care of their own retirement savings. I was lucky enough to fall into a pension, but unless you work for the government (or a bank) you are unlikely to have a classic pension plan (private-sector pension plans are down 0.2%).
This explains why you have some folks (like the Ontario government) that think that folks need to have more retirement savings, and they are going to impose it on you (with the proposed new Ontario Provincial Pension), whether you want it or not.
What is interesting is in the mid-90 folks at Nortel wanted out of the Pension Plan (a defined benefit program at the time) because it was screwing up their ability to put money in their RRSPs. Many thought they weren’t going to stay at Nortel their entire career.
Is the idea of a company pension dead? Opinions, dear reader?
Registered pension plan membership, by sector and type of plan
From this page at Stats Canada
| 2012 | 2013 | 2012 to 2013 | 2012 to 2013 | |
| number | number | net change | % change | |
| All sectors: Total | 6,184,990 | 6,185,159 | 169 | 0.0 |
| Males | 3,092,479 | 3,108,762 | 16,283 | 0.5 |
| Females | 3,092,511 | 3,076,397 | -16,114 | -0.5 |
| Defined benefit plans | 4,422,838 | 4,401,970 | -20,868 | -0.5 |
| Males | 2,053,060 | 2,044,367 | -8,693 | -0.4 |
| Females | 2,369,778 | 2,357,603 | -12,175 | -0.5 |
| Defined contribution plans | 1,030,319 | 1,036,747 | 6,428 | 0.6 |
| Males | 616,941 | 625,165 | 8,224 | 1.3 |
| Females | 413,378 | 411,582 | -1,796 | -0.4 |
| Other plans1 | 731,833 | 746,442 | 14,609 | 2.0 |
| Males | 422,478 | 439,230 | 16,752 | 4.0 |
| Females | 309,355 | 307,212 | -2,143 | -0.7 |
| Public sector | 3,179,312 | 3,184,276 | 4,964 | 0.2 |
| Males | 1,183,046 | 1,185,486 | 2,440 | 0.2 |
| Females | 1,996,266 | 1,998,790 | 2,524 | 0.1 |
| Defined benefit plans | 2,995,771 | 3,002,068 | 6,297 | 0.2 |
| Males | 1,104,591 | 1,107,382 | 2,791 | 0.3 |
| Females | 1,891,180 | 1,894,686 | 3,506 | 0.2 |
| Defined contribution plans | 146,290 | 143,034 | -3,256 | -2.2 |
| Males | 60,749 | 59,493 | -1,256 | -2.1 |
| Females | 85,541 | 83,541 | -2,000 | -2.3 |
| Other plans1 | 37,251 | 39,174 | 1,923 | 5.2 |
| Males | 17,706 | 18,611 | 905 | 5.1 |
| Females | 19,545 | 20,563 | 1,018 | 5.2 |
| Private sector | 3,005,678 | 3,000,883 | -4,795 | -0.2 |
| Males | 1,909,433 | 1,923,276 | 13,843 | 0.7 |
| Females | 1,096,245 | 1,077,607 | -18,638 | -1.7 |
| Defined benefit plans | 1,427,067 | 1,399,902 | -27,165 | -1.9 |
| Males | 948,469 | 936,985 | -11,484 | -1.2 |
| Females | 478,598 | 462,917 | -15,681 | -3.3 |
| Defined contribution plans | 884,029 | 893,713 | 9,684 | 1.1 |
| Males | 556,192 | 565,672 | 9,480 | 1.7 |
| Females | 327,837 | 328,041 | 204 | 0.1 |
| Other plans1 | 694,582 | 707,268 | 12,686 | 1.8 |
| Males | 404,772 | 420,619 | 15,847 | 3.9 |
| Females | 289,810 | 286,649 | -3,161 | -1.1 |
Source(s):
CANSIM table 280-0016.
I read the link from the government and I am really disapointed that they are calling a defined contribution plan a pension plan. I would not consider a Defined Contribution Plan a pension by far. It’s like saying everyone with a RRSP has a pension plan. A pension implies a regular income and benefits received based on rules that are fixed. A Defined Contribution Plan only means your employer matches your contribution and everything else is up to you. That’s how mine work anyways …
The employee can still royally screw up whereas a pension plan is out of the employee’s control. Sure it’s an improvement to the individual’s retirement bucket but it’s far from being a pension.
Really disappointed they are including DCP with Pension Plans.
As for your question, pension plans as they were are dead. They are by far too expensive and unions are by far too greedy for employees that become lazy and complacent. The accountability of an employee with a pension is usually gone because they are protected by unions and seniority. Both the union and pension systems need reform. I believe they have a purpose but they need reforms.
I think making employees lazy and complacent is a bit over the top, but I do agree that pensions and unions need a very good rethink (if not outright removal). The only places that seem to have major pensions still are governments and banks.
I’m a 40 year old American, and in exactly zero of my jobs have I had the ability to sign up for a pension plan. The lowering numbers is or will be a trend everywhere, especially with the globalization of the economy.
Historically pensions came from Union negotiations (at least for Bell & Northern Electric here in Canada that was the case), but I have a feeling the pension world is slowly dying.
I currently still have an employer pension plan. I’m well aware it could disappear before I retire so I make sure I still save for my retirement.
Good idea, Plan B’s are very important when it comes to your retirement. ✅