Addressing the Pension Dilemma in Canada
AbstractThe purpose of this paper is to advance understanding of defined benefit pension plans in Canada by focusing on important questions related to the funding, accounting and policy aspects of management of defined benefit pension plans. As well, the paper aims to impart a reasonable estimate of the standing of defined benefit pension plans at December 31, 2003 and to explore potential remedies for consideration by stakeholders inclusive of legislators, regulators, standard setters, employers and members. The analysis shows that at December 31, 2003, 59% of Canadian defined benefit pension plans continued to be in deficit. That number rises to 95% if provided for indexation of benefits. It is expected that an additional $160 billion is required to fully fund those deficits (assuming indexation of accrued benefits). Given that the future prospects of equities market performance are relatively conservative, it is unlikely that stock market returns alone will correct the situation; at least in the short term. On a solvency basis, $15 billion per year will need to be injected into defined benefit pension plans over the next five years to make up for the investment losses. Pension regulators must take a more proactive approach and monitor more closely pension plans that are in a deficit position.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Certified General Accountants Association of Canada in its series Working Papers with number 040601.
Length: 69 pages
Date of creation: Jun 2004
Date of revision:
Contact details of provider:
Postal: Suite 100, 4200 North Fraser Way, Burnaby, British Columbia V5J 5K7, Canada
Web page: http://www.cga-canada.org
More information through EDIRC
defined benefit pension plan; funding position of pension plans; household savings; retirement savings; retirement income; household finance; pension accounting;
Find related papers by JEL classification:
- D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Elena Simonova).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.