Pension Satellite Account, 2017
Pension wealth continues to increase
Pension wealth grew 6.8% in nominal terms in 2017, to $3,839 billion by the end of the year, following an increase of 3.5% in 2016. The growth in 2017 was predominately due to an increase in pension contributions and strong foreign equity markets.
The ratio of pension wealth to household net worth was 35.3%, up from 34.5% at the end of 2016.
All three pension tiers (social security plans, employer-based pension plans, and individual registered savings plans) posted gains in wealth from 2016 to 2017. This was the ninth consecutive year when all three pension tiers increased, with the exception of 2015, where individual registered pension plans declined by 0.2%.
Wealth of social security plans continues to outpace other pension tiers
During 2017, the wealth of social security plans rose 13.2% to $410.3 billion, after increasing 6.1% in 2016. Both the Canada Pension Plan (+12.9%) and the Quebec Pension Plan (+14.6%) were up due to strong performance in equity markets. Notably, the Standard & Poor's 500 (S&P 500) posted robust gains in 2017 and the Toronto Stock Exchange (TSX) also recorded strong growth.
The value of employer-based pension plans rose 5.6% to $2,196 billion by the end of 2017, outpacing the 3.0% increase in 2016. Wealth increased among trusteed pension plans, government consolidated revenue arrangements, and other employer-based pension plans.
The value of individual registered savings plans rose 7.1% to $1,233 billion by the end of 2017. In 2016, wealth in these plans grew 3.5% to $1,151 billion.
Private pension assets, the combined assets held in employer-based pension plans and individual registered savings plans, accounted for 89.3% of total pension wealth at the end of 2017, compared with 89.9% at the end of 2016.
Contributions increase at a faster pace
Contributions increased at a faster pace in 2017 compared with 2016, in tandem with strong employment growth. In 2017, contributions grew for employer-based plans (+5.2%), individual registered savings plans (+2.5%) and social security plans (+5.5%).
Investment income of pension plans was up 2.2% in 2017, after increasing 4.8% in 2016. This slowdown was due in part to lower growth in interest income in 2017.
Revaluations (the change in wealth due to changes in asset prices) and other changes added $132.9 billion to pension wealth in 2017, up from $18.0 billion in the previous year as the S&P 500 saw a larger increase and the TSX continued to post gains.
Trusteed pension plans benefited from strong markets posting revaluations and other changes of $44.3 billion in 2017, up from $1.2 billion in 2016. Similarly, revaluations in social security assets, increased from $6.2 billion in 2016 to $31.7 billion in 2017.
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.
For this release of the PSA, data from 2000 to 2016 were revised.
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 Latest Developments in the Canadian Economic Accounts (13-605-X) is available.
The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is available.
The Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-X) is available.
For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca) or Media Relations (613-951-4636; STATCAN.mediahotline-ligneinfomedias.STATCAN@canada.ca).
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