DB plans endangered

Number of workers covered by DB plans plunges 30 per cent in five years as costs soar
By Angela Scappatura
|Canadian HR Reporter|Last Updated: 06/15/2009

Defined benefit (DB) pension plans are fast becoming an endangered species, according to a report from Statistics Canada.

The number of Canadian employees who are DB plan members dropped 30 per cent between 1991 and 2006, according to Shifting Pensions, released late last month. While DB plans have seen a consistent yearly decrease, the membership in defined contribution (DC) plans has risen, said the report. And that data reflects what happened before the market and economy tanked.

In the past year, DB plans in Canada have faced unprecedented financial pressures thanks to tumbling stock markets and a battered economy. In the auto sector, workers and retirees from Oshawa, Ont.-based General Motors Canada have clamoured for government support, anxious their pensions will disappear. The failing company is struggling with an estimated $7-billion pension plan deficit.