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The percentage of paid workers covered by a pension plan declined, from 41% in 1998 to 38% in 2008.
Ottawa (7 January 2011) – While the number of persons covered by registered pension plans (RPP) has increased over the past decade, the proportion of paid workers with pension coverage has decreased slightly, according to the federal Office of the Chief Actuary (OCA).
According to the fact sheet entitled Registered Pension Plan (RPP) and Retirement Savings Coverage (Canada) released by OCA last month, the total number of individuals covered by an RPP grew from 5.1 million in 1998 to six million in 2008, an increase of 18%.
Yet, the percentage of paid workers covered by an RPP declined, from 41% in 1998 to 38% in 2008. This discrepancy is due to the fact that the number of paid workers in Canada has grown at a faster pace than the number of Canadians covered by an RPP.
While the majority of public sector employees have RPP coverage, the percentage dropped from 87% to 84% between 1998 and 2008. By contrast, only 25% of private sector employees had coverage in 2008, down from 28% 10 years earlier.
The RPP coverage picture out from a gender perspective seems to be narrowing. Of the six million Canadians with coverage in 2008, 3.1 million were men and 2.9 million were women. In comparison, 2.8 million men were covered in 1998, but only 2.3 million women. In 1989, only two million women had RPP coverage.
The percentage of paid workers in defined benefit (DB) plans has dropped 10% over the past decade, from 85% in 1998 to 75% in 2008. The shift from DB to defined contribution (DC) plans has been greatest in the private sector (from 77% to 57%), with just a 2% shift in the public sector (95% to 93%).
The trend toward conversion of DB plans into plans with both DB and DC components has grown over the decade, to the point where 16% of the private sector is now enrolled in such plans. In the public sector, 2% of members are in DB/DC plans, up from 1% in 1998.
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More information:
Registered Pension Plan (RPP) and Retirement Savings Coverage (Canada)