1 Introduction

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The financial preparedness of Canadians for retirement has gradually become one of the most relevant economic issues with far-reaching implications for policy-making–from fiscal and social to financial stability and sustainability decisions. Three main factors continue to drive this trend: (1) demographic effects (population aging, low fertility rates and increased life expectancy); (2) the impact of equity market fluctuations and a low interest-rate environment on pension plan assets; as well as (3) the trend decline in a relatively low household saving rate.

The effectiveness of pension-related debate, research and analysis, and ultimately the policy-making process, relies heavily on the availability of good quality data on pension stocks and flows. While Canadian pension assets and flows are accounted for within the Canadian System of National Accounts (CSNA), they are not fully articulated within this framework.

The Pension Satellite Account (PSA) aims to supplement the CSNA by providing additional detail on aspects of pension schemes and the movement of pension funds. It presents the values of pension stocks and flows in an integrated stock-flow matrix that parallels the framework of the CSNA, and therefore provides a comprehensive picture of the Canadian pension system. The PSA structure incorporates many aspects of pension schemes, such as contributions, investment income and withdrawals, and realized and unrealized gains and losses which contribute to change in wealth.

The PSA provides users with additional analytical datasets required to better analyze household consumption and saving behaviour in light of a significant shift in the source of funds from current income to dis-saving of accumulated assets. Dis-saving takes the form of the payment of pension benefits (employer-based plans) or withdrawals from pension assets (individual plans). It will allow a deeper understanding of personal wealth and its distribution.

The PSA project first released estimates in June 2008 for the level (or stock) of pension assets. The first full-matrix PSA release in 2009 covered the level of pension assets for the period 1990 to 2008 and the pension flows for the period 1990 to 2007.

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