What is the most popular type of pension plan?
The number of Canadians enrolled in registered pension plans (RPPs) has surpassed the 7.2 million mark, according to Statistics Canada (StatCan).
Active membership climbed by 293,500 people—or 4.2%—in 2023.
This outpaced overall employment growth of 3.8% over the same period, as measured by the Labour Force Survey.
The proportion of paid workers covered by an RPP rose to 37.7% in 2023, up from 37.5% the previous year. Coverage increased to 40.9% for women and to 34.8% for men.
Most Canadians are afraid they may not have enough cash saved up for life after work. In fact, 61% of Canadians fear running out of money in retirement, CPP Investments previously reported.
Provinces, genders
RPPs membership increased in all provinces in 2023, except for Manitoba (-1,300), according to StatCan. The largest number of new RPP members was in Ontario (+161,800), followed by Quebec (+54,800), British Columbia (+32,000) and Alberta (+18,700).
“The number of women who were active members of an RPP increased by 150,700 (4.2%) in 2023 from the previous year—surpassing 3.7 million. There were 142,800 more male members in 2023 compared with one year earlier, bringing their total membership to just over 3.5 million. Women’s share of active membership held steady at 51.3% in 2023,” said StatCan.
Also, defined benefit (DB) pension plans continued to account for the majority of RPP membership. In 2023, active DB plan membership rose by 4.2% to exceed 4.9 million, representing 68.1% of total RPP membership. Women comprised 56.0% of all DB plan members.
Defined contribution (DC) plans also saw expansion, with 65,300 new members in 2023—an increase of 5.1% year over year. DC plans represented 18.6% of all RPP members, with 86.7% of DC participants employed in the private sector. Membership in hybrid, composite, and combination plans increased by 28,400, bringing total participation in these plan types to more than 963,000.
For employers who want to give plan members the opportunity to invest for the future and save and—at the same time—manage business expenses, DC RPP is the logical choice, according to Manulife.
Total contributions
Total contributions to RPPs by employers and employees reached $79.3 billion in 2023, up $2.9 billion from 2022, noted StatCan. Employees contributed $31.7 billion (40.0%) while employers contributed $47.5 billion (60.0%), including $4.1 billion for unfunded liabilities.
The market value of RPP assets increased by $56.0 billion to nearly $2.4 trillion. The 36 largest pension plans—each with more than 30,000 active members—held 61.5% of total assets and accounted for 54.6% of total membership.
Amid Canadians’ worries about saving for their post-work life, contributions to registered retirement savings plans (RRSPs) are on track to hit a record high this year, according to a previous report from BMO Financial Group.
