Pension and Wealth Research Paper Series
Participation in private retirement savings plans, 1997 - 2008
Section 2 Data
Information identified as archived is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please "contact us" to request a format other than those available.
Data used for this report is derived from individual tax and benefits returns from the T1 Family File for years 1997, 2000, 2003, 2006 and 2008 provided by the Small Area and Administrative Data Division at Statistics Canada1. The T1 Family File is a cross-sectional dataset. Using the complete T1 Family File for those years allows us to include employed tax filers who filed a tax return in 1997 but not in 2008 as well as those who filed a tax return in 2008 but not in 19972. This avoids any variability that could arise from sampling.
Data for 2008 are preliminary. The number of tax filers and participants in private retirement savings plans is slightly lower compared to the final data. In 2006, missing tax filers in the preliminary data accounted for 1.5% of the tax filers in the final data. Nevertheless, the use of the 2008 preliminary data has no significant impact on the rates of participation in private retirement savings plans and the main conclusions of this study.
The information is as of December 31 of each reference year used. This report uses tax returns of living tax filers aged 15 or older3 which contain information on characteristics of individual tax filers, their total pension adjustment amount (PA) and on their total Registered Retirement Savings Plans (RRSP) contributions. Non-Canadian residents filing a tax return were excluded and only tax filers with non-zero employment income were considered.
The number of tax filers who reported a pension adjustment (PA) amount is used as a proxy for the number of participants in an employer-sponsored pension plan, including both Registered Pension Plans and Deferred Profit Sharing Plans4,5. The number of RRSP contributors was derived from the number of tax filers who reported RRSP contributions in a given year.
The report looks at the following characteristics of participants in a private retirement savings plan: age, sex and total income. Total income is defined on line 150 on the T1 tax return and used to classify employed tax filers by income quintiles6. The income quintile thresholds are provided in text table 1 in appendix.
- Townson (2006) notes that some researchers have suggested that workers in non-standard work arrangements might not be in a situation of financial vulnerability because many of them may be in a situation where a higher-earning spouse or partner is able to support them in old age. However, she argues that there is no guarantee that the higher-earning spouse will provide for the retirement of the lower-earning spouse and that given increasing instability of spousal relationships, the higher-earning spouse or partner may not be present to support the lower-earning spouse in old age. Schellenberg and Ostrovsky (2008) provide figures of the increasing marital instability for tax filers approaching 'usual' retirement age: 10.6% of men and 14.3% of women aged between 55 and 64 years old were separated or divorced in 2006, compared to 3.7% and 4.7% in 1976, respectively. We adopt Townson's views in our use of individual data, although acknowledging that aspects of retirement saving habits related to the family are interesting to analyze. Morissette and Ostrovsky (2006) note that increased coverage of individual women has helped to maintain coverage of couples as coverage of husbands declined.
- On the latter point, data from the 2006 Census show that 1.9 million individuals immigrated to Canada between 1996 and 2006, representing 6% of the population in 2006.
- This is the same age threshold that is used in the Labor Force Survey.
- An individual may have participated in more than one RPP/DPSP in a given year. In this case, the total PA of the individual is the sum of the PAs calculated by each employer.
- According to Marshall (2003), the number of DPSP participants is relatively small. The number of persons having a PA is also consistent with membership data from the Pension Plans in Canada survey that don't include DPSP members (Statistics Canada, CANSIM table 280-0016).
- The Yearly Maximum Pensionable Earnings set by the CRA falls in the fourth income quintile for the years that we analyzed. See text table 1 in appendix for income quintiles thresholds.
- Date modified: