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Side menu bar Catalogue Number 75-001-XIE Table of contents Latest issue News from The Daily Latest data Survey information Back issues Feedback Studies Latest issue in PDF

January 2006
Vol. 7, no. 1

Perspectives on Labour and Income

Trusteed pension plans

Typically, trusteed pension plans are either defined-benefit or defined-contribution, although a few are a combination of both. A defined-benefit plan stipulates the benefits a beneficiary shall receive. The employer is ultimately responsible to make up any funding liability to meet commitments. Defined-contribution plans specify the employee's contribution (if any) as well as the employer's. Benefits are provided from accumulated contributions plus the return on the investment of these monies.

In 1992, defined-benefit plans accounted for 68% of all trusteed pension plans, defined-contribution plans for 31%, and combination or 'other' plans for the remaining 1%. The proportion of defined-benefit plans rose steadily to 75% in 1998, while defined-contribution plans dropped to 17%. From 1998 to 2002, the proportions stabilized, at about 74% and 17% respectively. Combination and other plans grew significantly, reaching nearly 10% in 2002. But 2004 showed a distinct rise in defined-benefit plans to 77%, the number jumping by a third, from 2,234 in 2002 to 2,929 in 2004. During the same period, the number of defined-contribution plans rose less than 2%, from 521 and 530, while combination and other plans climbed more than 20%, from 290 to 357.

Defined-benefit plans represented over 94% of all trusteed pension plan membership in 1992, defined-contribution plans 5%, and combination and other plans less than 1%. By 2004, the defined-benefit portion had dropped to 87%, while the defined-contribution share remained at about 5%. However, combination and other had increased significantly to about 8%. Combination plans typically exist to address the pension needs of different groups of employees under a single employer. For example, hourly paid employees may be in a conventional defined-benefit plan, whereas salaried employees may be in a defined-contribution plan.

Defined-benefit plans represented nearly 97% of all trusteed pension fund assets in 1992, with defined-contribution plans holding 3%, and combination and other plans less than 1%. As with membership, the proportion of assets held by defined-benefit plans dropped steadily, reaching 91% by 2004. Defined-contribution plans dropped below 3%, but combination and other plans grew to nearly 7%.

Combination plans may have increased because existing defined-benefit plans have added a defined-contribution component. Both the components may be active, or the defined-benefit part may have been frozen with all new contributions going to the defined-contribution part. Trustees may now be considering such plans as combination plans. Also, new combination plans may have been created with defined-benefit and defined-contribution components. (Trusteed pension plans - Table)

For further information, contact Robert Anderson of the Income Statistics Division. He can be reached at (613) 951-4034 or

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