Do You Have a Good Pension Plan?

Geoff Currier and Evelyn Jacks

Do you have a great job? For many people, it’s not just about salary and workplace culture anymore. Increasingly, at a time of great volatility, a great job is one with a good employer-sponsored group health and an employer-sponsored retirement plan. If not, the criteria changes: are you making enough money to fund these plans on your own? Consider the following:

The Backdrop: Any taxpayer who is trying to make ends meet today may be battered by volatility: from inflation (which rose again to 1.9% in June) to investment market returns (which slid  on inflation news from a record high on July 14) to unemployment rates (running at 6.9% to the end of June). It may be time to get a new job, a second one, or to start an entrepreneurial venture.

New research released in June by Statistics Canada shows that Canadians who have a job with both a group health benefit plan and in particular, an employer sponsored pension plan, can breathe a bit easier about the risks to their financial futures, especially with recent market returns.   

The good news? When it comes to employer-sponsored pension plans in Canada, also known as trusteed pension funds, or Registered Pension Plans (RPPs), the news so far is excellent based on recent trends.

According to Statistics Canada, “The market value of assets held by Canadian trusteed pension funds reached $2.5 trillion by the end of 2024.” This is a year over year increase of 9.8%, an outstanding rate of return.

When it comes to growth, equities and bonds were the strongest performers. Foreign assets out-performed domestic assets by a wide margin (14.8% vs 4.2%).

RPP Members are Growing. Active members of a registered pension plan (RPP) grew by 293,500 (+4.2%) from 2022 to over 7.2 million in 2023 and this number has held steady in 2024. This compared with a growth of 690,844 (+3.8%) in employment, according to the Labour Force Survey (LFS), over the same period.

In figures released June 24, 2025, a lot of that has to do with the increases in the public sector: plans there added just under 169,000 participants (+4.5%), for a total of just over 3.9 million members.  

But plans in the private sector increased, too, adding almost 125,000 members (+3.9%), and surpassing 3.3 million members. By comparison, employment rose by 3.0% in the public sector and by 4.0% in the private sector over the same period. 

StatsCan tells us that membership in (defined benefit) DB plans accounted for 68.1% of the total membership in RPPs in both 2023 and 2022 (while) membership in defined contribution (DC) plans, accounted for 18.4% of all RPP membership in 2022. 

It is noteworthy that public sector pension plans are DB plans, and their assets did much better from the point of view of returns: they improved by 11.8% from 2023 to 2024 – a significant difference from private sector plans, which only grew by 2.1% for that same time period. 

Here is what’s important: Most (86.7%) members of DC plans worked in the private sector in 2023. In short, government employees are largely benefiting from enrolment in DB plans, which also have seen the better growth results. This makes the case for more proactive planning for private sector employees as opposed to public sector employees.

The bad news? Two things to consider. First, the majority of your clients will not be enrolled in one of these plans. In fact, the proportion of all paid workers covered by an RPP, was just 37.7% in 2023, up from 37.5% in 2022. That means about 62% of workers are not covered to manage future health and retirement risks and need to fend for themselves. That’s where proactive advisors really shine.

For those folks, it’s good to reinforce two financial realities:

1. Employer-sponsored pension plans are usually portable. It’s important to know what’s happening with your clients who are experiencing job loss or change. They will need to understand more about moving their plan to a new company (or into their own privately held plans) and you can help guide them through that process.
2. For those who don’t have an RPP, or who may have a DC plan, now is a great time to start saving more. Obvious good choices are the TFSA (Tax Free Savings Account and the RRSP (Registered Retirement Savings Account).

Education Leads to Good Pensions: In either case, becoming a member of this club of future-ready employees who score great jobs with employer-sponsored group benefits and pensions, or those with salaries that enable self-funding, begins at school. Looking a this another way: it’s in the best interests of your clients to have their children get as much education as possible in order to land the best jobs with the most benefits.

Starting a RESP for a child can reap huge rewards when the time comes to enter post secondary education. You can offer your clients, especially new parents, with the information which will help them provide for their children’s future.

In addition, for those who may be experiencing job termination, the RRSP is a great place to turn for retraining funds. The Lifelong Learning Plan allows RRSP holders to tap into funding to do so, for themselves or their spouse (but not your children). Up to $10,000 can be withdrawn in a calendar year to fund full-time training; a total of $20,000 in a lifetime. (Amounts can be withdrawn until January of the 4th calendar year after the first withdrawal.)

Repayments to the RRSP are made over 10 years, generally 1/10 of the withdrawal in each year; otherwise the amounts are added to income and taxed.

The Foggy Future: Many of Canada’s pension plans face an uncertain future as Canadian pension funds are heavily invested in the United States. Tariffs and tax change in general are a moving target at the moment, as everyone knows, and Canadians may have more questions about their future returns, given these realities. It isn’t 100% clear that Canada will be included in the countries to be penalized in this changing landscape. If you are advising clients who are in EPP’s, they should be made aware that American politics may have an impact on their future pensions.

The Bottom Line. In an era where workers are often changing companies, or are now finding themselves unemployed, finding a good job increasingly means, one that can ensure retirement savings can be funded – either through an employer-sponsored fund or through a privately held savings plan such as a TFSA (Tax Free Savings Account) or RRSP (Registered Retirement Savings Plan).

Additional Educational Resources: 

The Knowledge Bureau Network: Stay tuned weekly to Knowledge Bureau Report for continuing coverage of breaking tax and economic news and tune in to a new podcast- Real Tax News You Can Use with Evelyn Jacks: podcast@knowledgebureaureport.com