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Perspectives on Labour and Income - November 2007

Pensions and Retirement Savings of Families

René Morissette and Yuri Ostrovsky

  • A decline in the pension coverage of male employees between 1978 and 2005, combined with a slight decrease in men's labour force participation, led to a 10 percentage point decline in the proportion of men with an RPP over the last two decades. In contrast, the percentage of women with an RPP rose, thanks to a strong increase in their participation rate and a slight increase in RPP coverage among female employees.
  • The increase in the proportion of women with an RPP almost fully offset the decline among men. As a result, the percentage of individuals with an RPP changed very little over the last two decades: from 24% in 1978 to 22% in 2005.
  • The proportion of couples with at least one RPP fell moderately over the past 15 to 20 years, as the growth in the proportion of wives with an RPP helped mitigate a substantial decline in the proportion of husbands with an RPP.
  • On average, retirement savings of Canadian families rose over the last two decades. However, the distribution of retirement savings became more unequal. While two-parent families in the top 20% of the earnings distribution increased the sum of their RPP and RRSP contributions since the mid-1980s, contributions of those in the bottom 20% stagnated. To a large extent, the uneven growth in retirement savings appears to be driven by the sharp increase in family earnings inequality.

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Authors

The authors are with the Business and Labour Market Analysis Division. René Morissette can be reached at 613-951-3608. Yuri Ostrovsky can be reached at 613-951-4299 or both at perspectives@statcan.gc.ca.


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