Pension Satellite Account, 2018
Pension wealth continues to increase
Pension wealth consistently accounts for over half of households' financial assets. The ratio of pension wealth to household net worth was 35.8% in 2018, up from 35.3% at the end of 2017. Non-financial assets for households declined 2.2% in 2018, compared with an increase of 6.2% in 2017. As a result, the ratio of pension wealth to household non-financial assets increased to 84.2%, up from 81.7% at the end of 2017.
Pension wealth grew 0.8% in nominal terms in 2018, to $3,852 billion by the end of the year, following an increase of 7.0% in 2017. The slower pace of growth was predominantly due to the decline in equity markets, which affected the value of assets. By the end of 2018, the Toronto Stock Exchange (TSX) had dropped by 11.6% and the Standard and Poor's 500 declined 6.2%. However, these exchanges quickly rebounded in the beginning of 2019.
Social security plans and employer-based pension plans posted gains in wealth from 2017 to 2018. In contrast, individual registered savings plans posted a decline in wealth over the same period.
Wealth of social security plans continues to outpace other pension tiers
By the end of 2018, the wealth of social security plans rose 8.1% to $443 billion, after growing 13.1% in 2017. Both the Canada Pension Plan (+9.2%) and the Quebec Pension Plan (+2.9%) increased their wealth.
The value of employer-based pension plans rose 1.3% to $2,208 billion by the end of 2018, a lower growth rate than the 5.8% increase in 2017. The value of trusteed pension plans edged down $478 million in 2018. Wealth increased among government consolidated revenue arrangements and other employer-based pension plans.
The value of individual registered savings plans declined 2.7% to $1,200 billion by the end of 2018, as markets were down at the end of the year. Wealth in these plans had grown 7.1% in 2017 to $1,233 billion.
The combined assets held in employer-based pension plans and individual registered savings plans accounted for 88.5% of total pension wealth at the end of 2018, compared with 89.3% of total pension wealth in 2017.
Contributions, withdrawals and investment income increase
Pension contributions reached $200 billion in 2018, a 3.4% increase from 2017. In 2018, contributions grew for employer-based plans (+3.2%), individual registered savings plans (+4.1%) and social security plans (+3.2%).
Investment income of pension plans was up 3.9% in 2018, after increasing 2.5% in 2017. Investment income increased despite weaker growth in the equity markets. Withdrawals increased 6.0% in 2018, compared with the 1.3% growth recorded in 2017.
Revaluations (the change in wealth due to changes in asset prices) and other changes reduced pension wealth by $77 billion in 2018, a reversal from the $142 billion upward revaluation in the previous year, as the Standard and Poor's 500 and TSX posted losses at the end of 2018.
Employer-based pension plans and individual registered savings plans lost a combined $94 billion in wealth because of downward revaluations and other changes. Social security plans benefited from upward revaluations of $17 billion in 2018. However, these revaluations were smaller than the upward revaluations of $31 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 is mainly defined by data availability. The breakdown of the three tiers into further detail is provided where data support it and reflects a mixture of detail by program and by institutional dimension.
For this release of the PSA, the data for 2006 to 2017 were revised.
The data visualization product "Pension satellite account: Interactive tool," which is part of Statistics Canada – Data Visualization Products (71-607-X), is now available.
The Economic accounts statistics portal, accessible from the Subjects module of our website, features an up-to-date portrait of national and provincial economies and their structure.
The Latest Developments in the Canadian Economic Accounts (13-605-X) is available.
An overview of the scope and structure of the Pension Satellite Account and a description of the sources and methods used to derive its stock and flow estimates are available in the Guide to the Canadian Pension Satellite Account (13-599-X).
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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