Pension coverage declining in Canada

The percentage of paid workers covered by a registered pension plan (RPP) decreased from 41% to 39% from 1999 to 2009, according to the Office of the Chief Actuary.

The entire hit was taken by men, whose percentage declined from 42% to 38%. In contrast, women have achieved a small increase, moving from 39% to 40% (Surpassing the rate achieved by men in 2004.)

The decline was sharpest in the private sector, with RPP coverage shrinking from 28% to a mere 25%. But the public sector also saw some decline moving from 88% to 86%.

The type of RPP has also changed. The superior "defined benefit plans" (where workers are guaranteed a certain pension on retirement) declined from 85% to 75% of all RPPs . (The other, main, sort of RPP, “defined contribution plans”, are inferior as they are much more risky for the worker, with pensions depending on investment returns and the going interest rates when you happen to retire.)

The decline in defined benefit plans was entirely in the private sector with defined benefit coverage shrinking from 75% to 56% of RPPs. In the public sector, defined benefit coverage was stable at 94% of the RPPs.

Private sector unionization has declined in recent years, going down with the decline in manufacturing, a cornerstone of the Canadian union movement. This data suggests that decent working conditions are also declining.

This is a vital issue for public sector workers as well -- our fortunes are tied to the fortunes of other workers, the private sector included.

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