Public sector, women push growth in pension membership

Employer, employee contributions at record high: StatsCan
||Last Updated: 05/11/2011

Membership in registered pension plans (RPPs) in Canada edged up 0.2 per cent in 2009 to nearly 6,024,000. This was the slowest rate of growth in four years, according to Statistics Canada. As of Jan. 1, 2010, there were 19,128 registered pension plans in Canada, down slightly from 19,179 on the same date one year earlier and the second consecutive annual decline.

The entire increase came from the public sector, where RPP membership rose 2.6 per cent to 3,026,400. In the private sector, the number of members fell 2.1 per cent to 2,997,300. As a result, for the first time, membership in the public sector accounted for more than one-half (50.2 per cent) of the total membership in RPPs, compared to 46 per cent one decade ago.

The participation of women continued a long-term upward trend that began in 1998, said Statistics Canada. Women accounted for two-thirds of the increase in RPP membership in the public sector during 2009. Membership among women increased 1.6 per cent to just over 2,998,000 while among men, it fell one per cent to 3,026,000.

During the recent economic downturn, the number of male workers in the private sector fell by 4.5 per cent, with the manufacturing sector accounting for almost one-half of the decline, found Statistics Canada.

The rate for women was higher because of the high proportion of women employed in the public sector, where the majority (87.3 per cent) of female employees are covered by a pension plan. The coverage rate for RPPs in the private sector was around 25 per cent.

As of Jan. 1, 2010, men accounted for 50.2 per cent of total membership, down from 50.9 per cent on the same date one year earlier, while the percentage of women rose from 49.1 per cent to 49.8 per cent — their highest ever. The pension coverage rate or proportion of all employees covered by an RPP was 39.2 per cent in 2009 (40.4 per cent for women and 38.1 per cent for men).

On an industry basis, membership rose in public administration (+52,350), finance, insurance and real estate (+34,860) and educational services and health care (+23,250). The largest decline occurred in manufacturing (-62,000).

Contributions reach record high

Total employer and employee contributions to RPPs in 2009 amounted to a record high of $53.4 billion, said Statistics Canada. Employers contributed 71 per cent of the total, up from 67 per cent in 2008. About 33 per cent of the employer contributions, about $12.6 billion, were for unfunded liabilities, more than twice the amount in 2008.

The market value of assets in RPPs reached $1,098 billion in 2009, up eight per cent from 2008 when significant losses were recorded as a result of the economic downturn, said Statistics Canada. However, assets in 2009 remained five per cent below the high of $1,155 billion in 2007.

In terms of solvency, the latest results for the three-year period ending in 2009 show 83 per cent of RPPs had unfunded liabilities, so the liabilities were greater than the assets. However, less than 30 per cent of RPPs had a solvency ratio of less than 80 per cent.

Defined benefit plans most prevalent

About 4,529,000 people, or 75 per cent of those with a RPP, were in a defined benefit pension plan, a 0.5-per-cent increase, found Statistics Canada. The rate of participation in these plans has declined constantly from more than 85 per cent one decade earlier.

Membership in the other most frequent type of plan, defined contribution, increased 2.4 per cent to 961,845. This type has gained in popularity over the years and accounted for 16 per cent of all RPP membership as of Jan. 1, 2010. More than 85 per cent of defined contribution members are in the private sector.

Membership in hybrid and combination pension plans accounted for nine per cent of total membership, said Statistics Canada.

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