Pension Satellite Account, 2015
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Released: 2016-12-15
Pension wealth continues to grow despite the weak performance in equity markets
Pension wealth rose 6.1% to $3,496 billion in nominal terms at the end of 2015, following a 10.0% increase in 2014. This was the seventh consecutive year that all three components (social security, employer-based pension plans and individual registered savings plans) of pension wealth have increased.
The slower growth of pension wealth in 2015 was mainly attributable to the decline in international and domestic equity markets, as the TSX index fell 11.1% and the US S&P 500 index fell 1.8%. These declines were offset by increased pension contributions and investment income and by a revaluation effect due to the depreciation in the Canadian dollar, which increased the value of foreign-denominated pension assets.
At the same time, the ratio of pension wealth to net worth was 36.7%. Since the financial crisis of 2008, this ratio has generally been on an upward trend.
Lower growth of assets for all pension plan types
Wealth in employer-based pension plans rose 6.5% from a year earlier to $2,012 billion at the close of 2015. All three components of employer-based pension plans were up in 2015: trusteed pension plans rose 7.1%, government consolidated revenue arrangements increased 1.4%, and other employer-based pension plans grew 8.0%.
Assets in individual registered saving plans rose 2.5% from a year earlier to $1,142 billion at the end of 2015. This growth was weaker than the 8.1% increase recorded at the end of 2014.
Assets held in employer-based pension plans and individual registered saving plans combined accounted for 90.2% of total pension wealth at the end of 2015, compared with 91.1% of total pension wealth in 2014. Social security assets accounted for 9.8% of the total, more than double the share at the end of 1999 (4.3%).
Wealth in social security plans rose 17.1% from a year earlier to $342 billion at the close of 2015, following a 17.6% increase in 2014.
Withdrawals rise at a faster pace than contributions
Withdrawals from pension plans rose 7.3% in 2015, a faster pace than the 5.0% growth in contributions to pension plans. Employer-based pension plan withdrawals rose 11.0% in 2015, more than double the 5.1% increase in 2014. Social security plan withdrawals increased 4.6%, up from the 4.3% growth in 2014. On the other hand, withdrawals from individual registered savings plans grew 6.2%, a slower pace than the 9.7% recorded a year earlier.
The investment income of pension plans grew 8.4% in 2015. Investment income was also up in social security plans (+24.9%), employer-based pension plans (+9.0%) and individual registered savings plans (+1.1%). The strong investment income in social security plans in 2015 was primarily due to the strong net returns of the Canada Pension Plan on its large international investment portfolio.
Pension plan contributions grew 5.0% in 2015 to $186 billion, following a 3.5% gain in 2014. In 2015, contributions grew for employer-based plans (+6.7%), individual registered savings plans (+4.0%), and social security plans (+3.3%).
Pension plan contributions and investment income combined grew 6.3%, following a 5.6% gain in 2014. Revaluations added $88 billion to pension wealth in 2015, down from $193 billion in 2014.
Note to readers
The Pension Satellite Account (PSA) provides an integrated stock-flow representation of the Canadian pension system. The PSA fully articulates the wealth positions (level of assets) as well as the pension inflows (contributions and investment income), outflows (withdrawals), and realized and unrealized gains and losses that contribute to change in wealth (revaluations and other changes in assets).
The PSA presents annual estimates for each of the three tiers of the Canadian pension system: social security, employer-based pension plans, and voluntary individual registered savings plans. The institutional dimension of the PSA presentation has been mainly defined by data availability. The breakdown of the three tiers into further detail is provided where data supported it and reflects a mixture of detail by program and by institutional dimension.
With this release of the PSA, the data for the period 2013 to 2014 were revised.
Products
An overview of the scope and structure of the Pension Satellite Account as well as a description of the sources and methods used to derive its stocks and flows estimates are available in the Guide to the Canadian Pension Satellite Account (13-599-X).
The System of macroeconomic accounts module features an up-to-date portrait of national and provincial economies and their structure.
Contact information
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