Even as pension coverage has declined, so has the proportion of RRSP contributors, according to a fact sheet released Thursday by the Office of the Superintendent of Financial Institutions (OSFI).
OSFI reports that the proportion of employees covered by a registered pension plan (RPP) has declined by 2 percentage points, from 40% in 2001 to 38% in 2011. And, the number of active RPP members as a percentage of the labour force also declined slightly from 34% in 2001 to 32% in 2011.
The decline is more pronounced in the private sector, where the RPP coverage dropped from 28% in 2001 to 24% in 2011. Coverage in the public sector also decreased slightly from 87% to 86% over the same period.
And, at the same time, there’s been an underlying shift from defined benefit (DB) to defined contribution (DC) plans, at least in the private sector. Among those with a workplace pension in the private sector, the share in DB plans has dropped from 74% in 2001 to 51%; whereas it has stayed stable at 94% in the public sector.
Notwithstanding these trends, there has also been a decline in taxpayers contributing to an RRSP. The absolute number of RRSP contributors has dropped from from 6.2 million to 6.0 million between 2001 and 2011. And, with the growth in the labour force over that period, this means that the proportion of workers contributing to an RRSP also decreased from 39% to 32% over the same period.
The decreasing share of workers contributing to RRSPs was observed in all age groups, OSFI reports, but it was most dramatic in those over age 55. In the 55 to 64 age group the proportion of contributors declined from 59% to 46%, and in the 65+ group, the rate declined from 57% to 43%.
The one bright spot in the retirement savings picture is the use of Tax Free Savings Accounts (TFSAs), where OSFI reports that the share of adult taxpayers who are TFSA holders has increased every year since its inception in 2009. By the end of 2011, approximately 8.2 million Canadians had opened a TFSA compared to 6.7 million at the end of 2010 and 4.9 million at the end of 2009. The share of adult taxfilers who are TFSA holders has increased from 19% in 2009 to 31% in 2011.
However, the data doesn’t reveal how much is actually being saved in TFSAs.