Chief Economic Analyst (613-951-9162)

A satellite account is attached to the main National Accounts to show transactions in a specific part of the economy. Other satellite accounts in Canada have been created for tourism and nonprofit institutions.

The revaluation of the value of pension assets reflects capital gains and losses due to fluctuations in the price of financial assets as well as the impact of the exchange rate on the value of assets held outside of Canada.

Social security withdrawals in this paper exclude Old Age Security payments, which are not funded by pension assets.

In 2007, membership in RPPs rose to 5.9 million, according to Pension plans in Canada (The Daily, June 8, 2009).

Canada had a relatively high proportion of pension assets invested in stocks relative to bonds, and so was more affected by the drop in stock market prices in 2008 than most other countries. See p. 2 of “Pensions and the crisis”, OECD, 2009.

The Old Age Security Act covers four distinct programs, the largest of which are the Old Age Security pension (introduced in 1952, it pays a flat benefit subject to clawback) and the Guaranteed Income Supplement (added in 1967 to increase incomes to the elderly poor).

The CPP was restricted to buying provincial government bonds until the creation of the CPP Investment Board in 1997. The Caisse de dépôt et de placement du Québec always has had fewer restrictions for the QPP. See Bruce Little, Fixing the Future, U of T Press, 2009, for a complete discussion of the overhaul.

The CPPs investment income was stable at $4.4 billion between 1990 and 1995 because it had been obliged to buy 20-year non-redeemable provincial government bonds (in proportion to provincial contributions to the CPP). With withdrawals exceeding contributions in the early 1990s, assets fell, and no new bond purchases were made, leaving the rate of return constant despite falling bond rates during this period.

This is based on studies by the Chief Actuary of Canada, 23rd Actuarial Report of the CPP as Dec 31, 2006, published by the Office of the Superintendent of Financial Institutions.

Pension plans in Canada, The Daily, June 8, 2009.

P.21, The wealth of Canadians: An Overview of the Results of the Survey of Financial Security, Catalogue no. 13F0026MIB.

Government consolidated revenue agreements are the unfunded pension liabilities of governments. These assets were little changed over time, as periods of increase when assets are being acquired to fund a particular pension liability were followed by a decline when these pensions are fully-funded (and transferred to employer-sponsored public pension funds, which explains why the latter shows several years of sudden gains due to contributions, such as in 2004 and 2007).

Revaluations also include administrative costs. Data for 2008 show that the administrative costs of private plans were equal to 0.118% of assets, versus 0.075% for public plans. From Table 280, Quarterly Estimates of Trusteed Pension Funds, STC Catalogue No. 74-001-XIB.

As recently as 1997, the population aged 60 to 64 years was declining. Since then growth accelerated from 2.2% in the two years ending in 1999 to 12.0% in 2006 and 2007.

More specifically, G. Schellenberg and Y. Ostrovsky found that “RPP members received more from pensions and superannuations than non-members, but less from interest, investments and dividends and from earnings.” P. 9 in “Pension coverage, retirement status and replacement rates among a cohort of Canadian seniors,” Statistics Canada Analytical Studies. Branch, forthcoming.

Labour Statistics Division (613-951-7118)