Section 3 Participation in private retirement savings plans

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Participants in private retirement savings plans are defined as those who participate in an employer-sponsored pension plan (EPP), contribute to a Registered Retirement Savings Plan (RRSP) or both.  Since some individuals both participate in an EPP and contribute to a RRSPs, the number of participants in private retirement savings plans is lower than the sum of EPP members and RRSPs contributors (see text tables 2 to 4 in appendix).

The number of Canadian tax filers aged 15 years and older with employment income participating in a private retirement savings plan increased  from 8.1 million in 1997 to 8.9 million in 2008. (see chart 1)   This represents a 11% increase over the period, which is smaller in relative terms compared to the 19% increase in the number of tax filers with employment income.  Therefore, the share of employed tax filers who participated in a private retirement savings plan declined from 54% in 1997 to 50% in 2008. (see chart 2)

The number of EPP members increased from 4.8 million in 1997 to 5.7 million in 2008, representing a 19% increase, while the number of RRSPs contributors remained near 6.0 million.  The share of workers participating in an EPP remained fairly constant (32%) while the share of employed tax filers contributing to a RRSP decreased from 41% in 1997 to 34% in 2008, the most significant part of the decrease occuring between 1997 and 2003. 

The share of workers participating in an EPP only increased from 13% to 16% while the share of workers participating in an EPP and contributing to a RRSPs decreased from 19% to 16% over the period (table 1).

Table 1 Rate of participation in private retirement savings plans, by type of planTable 1 Rate of participation in private retirement savings plans, by type of plan

Chart 1 Private retirement savings plans participantsChart 1 Private retirement savings plans participants

Chart 2 Rate of Participation in Private Retirement Savings PlansChart 2 Rate of participation in private retirement savings plans

The rate of participation in private retirement savings plans declined for both men and women from 1997 to 2008.  However, the rate of participation for men remained higher than the one for women over the period. Table 2 shows that in 2008, 51% of men and 50% of women were participating in a private retirement savings plan, compared to 56% and 52% in 1997, respectively.  There has been a reduction in the gap between the rates of participation in private retirement savings plans of men and women between 1997 and 2008.  The number of employed tax filers aged 15 or more increased by 24% for women and 15% for men between 1997 and 2008, while the number of participants in private retirement savings plans increased by 19% for women and by 4% for men.

In 2008, the number of women participating in an EPP exceeds  the number of men (figure 3).  The share of women participating in an EPP increased from 32% in 1997 to 34% in 2008 while the share of men declined from 33% to 31%.  A larger share of women was participating in an EPP in 2003, 2006 and 2008 compared to men. The share of both men and women contributing to a RRSPs both declined over the period, from 43% to 35% and from 39% to 33% respectively. 

Data on registered pension plans (RPPs) from the Pension Plans in Canada survey also show that the number of female members increased at a faster pace than the number of male members.  RPP male membership increased by 7% between 1997 and 2007, while RPP female membership increased by 28% over the same period1.  In fact, the increase in female RPP membership accounted for 76% of the total increase in RPP membership between 1997 and 2007.

Chart 3 Number of employer-sponsored pension plan members, by sexChart 3 Number of employer-sponsored pension plan members, by sex

Table 2 Rate of participation in private retirement savings plans, by sexTable 2 Rate of participation in private retirement savings plans, by sex

Although consideration is given to the complete population aged 15 years and older, focus in this analysis is on the coverage of 'prime-aged' workers (i.e those between 35 and 54 years old):  63% of them were participating in a private retirement savings plan in 2008, compared to 66% in 1997.  These shares are the highest when compared to other age groups. (See chart 4)

Both the number of private retirement savings plan participants and the number of employed tax filers in this age group increased over the period, with growth of 4% and 10% respectively.  However, those increases occurred solely in the 45 to 54 year old age group.  Participation in private retirement savings plans is higher for those between 45 and 54 years old than for those between 35 and 44 years old (see text table 3 in appendix). 

The 'prime-aged' workers age group is also the one with the highest number of EPP participants (3.3 million in 2008) and with the highest rate of participation in an EPP (42% in 2008). Charts 5 and 6 show the rate of participation in EPPs and RRSPs by age group.

Important increases in both the number of employed tax filers and the number of private retirement savings plan participants occurred for the age group 55 to 64 years old and the 65 years old or older age group.  The number of employed tax filers in the former age group increased from 1.4 million in 1997 to 2.6 million in 2008 while the number of private retirement savings plan participants increased from 0.9 million to 1.5 million over the same period. Those aged 65 and over also saw an important increase in the number of tax filers over the period (from 495,000 to 968,000 ) but the number of private retirement savings plan participants increased at a slower pace (from 124,000 to 195,000).

Chart 4 Rate of participation in private retirement savings plans, by age groupChart 4 Rate of participation in private retirement savings plans, by age group

Chart 5 Rate of participation in employer-sponsored pension plans, by age groupChart 5 Rate of participation in employer-sponsored pension plans, by age group

Chart 6 Rate of Participation in registered retirement savings plans, by age groupChart 6 Rate of Participation in registered retirement savings plans, by age group

Participation in private retirement savings plans increases with income: 9% of employed tax filers in the lowest income quintile participated in a private retirement savings plan in 2008, while that share stood at 86% for those in the highest quintile.  Not surprisingly, the highest number of private retirement savings plan members are found in the highest income quintiles.  The number of private retirement savings plan members increased within each income quintile.  However, due to the increase in the number of employed tax filers within each income quintile, the share of employed tax filers participating in a private retirement savings plan remained fairly stable for the lowest income quintile and declined for the four other quintiles between 1997 and 2008. 

Charts 7 to 9 provide rates of participation in private retirement savings plans by income quintile. The two lowest income quintiles were subject to significant relative increases in the number of EPP members between 1997 and 2008, although they represent a small share of EPP members2.  The number of EPP members increased in the three other quintiles, although at a pace that is closer to the growth in the number of employed tax filers.

As seen in chart 1, the total number of RRSP contributors remained fairly stable between 1997 and 2008.  However, there were different variations within each income quintile.  The three lowest income quintiles saw a decline in the number of RRSPs contributors, while that number grew at a slower pace than the increase of the number of employed tax filers for the two highest income quintiles.

Chart 7 Rate of participation in private retirement savings plans, by income quintileChart 7 Rate of participation in private retirement savings plans, by income quintile

Chart 8 Rate of participation in employer-sponsored pension plans, by income quintileChart 8 Rate of participation in employer-sponsored pension plans, by income quintile

Chart 9 Rate of participation in registered retirement savings plans, by income quintileChart 9 Rate of participation in registered retirement savings plans, by income quintile

In order to assess if variations in participation in private retirement savings plans within income quintiles are linked with variations in participation within age groups, it is useful to look at the rates of participation within each combination of income quintile and age group considered previously. Text table 9 (see appendix) presents the participation rates within each combination of age group and income quintile for 1997 and 2008.  For simplicity, the two lowest income quintiles were lumped in a single category, as well as the two highest income quintiles.

The share of employed tax filers participating in an EPP increased or remained stable between 1997 and 2008 within each combination of age group and income quintile, except for those who are in the two highest income quintiles and aged between 35 and 54 or between 55 and 64 years old. The share of RRSP contributors within each combination of age group and income quintile declined for all sub-groups considered between 1997 and 2008.  The combined effect of the variations in participation rates in EPPs and in RRSPs resulted in a decline in the participation rate in private retirement savings plans within almost each age-income subgroup (see text table 13 in appendix).

Who does not participate in a private retirement savings plan?

Nearly 50% of Canadian employed tax filers were participating in a private retirement savings plan in 2008.  What are the characteristics of the other half of the population studied that do not participate in any private retirement savings plan?

As reported previously, 63% of tax filers aged between 35 and 54 years old were participating in a private retirement savings plan in 2008.  The 37% who did not participate in any plan in this age group accounted for 34% of employed tax filers who did not participate in any private retirement savings plan in 2008.

As seen in chart 7, non-participants are mostly found in the lowest income quintile: 91% of employed tax filers in this income quintile did not participate in any private retirement savings plan in 2008 and they accounted for 37% of all non-participants.  However, the two highest income quintiles represented 12% of non-participants in 1997 and that share increased to 16% in 2008.


  1. Source: CANSIM. Table 280-0010.
  2. The two lowest income quintiles represented 40% of employed tax filers aged 15 or more but only 13% of EPP members in 2008.
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