Pension Satellite Account for 2014
Ottawa - Growth in pension wealth driven by strong performance in international equity markets
Pension wealth rose 9.3% (or $280 billion) to $3.3 trillion at the end of 2014, following a 9.7% increase (or $264 billion) in 2013. The increase in pension wealth for 2014 was broad-based, with social security, employer-based pension plans and individual registered savings plans posting gains.
The ratio of pension assets to household credit market debt has been rising since 2011. Pension assets were 1.79 times the credit market debt held by households in 2014, up from 1.71 in 2013 and 1.63 in 2012. Despite the recent growth, the ratio was still below 1.84 reached in 2006 before the financial crisis, as well as the record high of 2.13 in 1999.
The growth in pension wealth in 2014 was mainly driven by the strong performance in international equity markets. Pension wealth accounted for 57.4% of total financial assets held by Canadian households at the end of 2014, up from the 57.1% in 2013.
Trusteed pension plan assets drive growth of employer-based pension plans
Wealth in employer-based pension plans rose 8.9% (or $153 billion) to $1.9 trillion at the close of 2014. All three components of employer-based pension plans were up in 2014: trusteed pension plans rose 10.1% (or $140 billion), government-consolidated revenue arrangements increased 1.5% (or $3 billion), and other employer-based pension plans grew 10.3% (or $10 billion).
Assets in individual registered saving plans increased 8.1% (or $83 billion) to $1.1 trillion at the end of 2014. This followed a 10.7% increase (or $100 billion) in 2013.
Assets held in employer-based pension plans and individual registered saving plans combined accounted for 91.1% of total pension wealth at the end of 2014, compared with 91.7% of total pension wealth in 2013.
Wealth in social security plans rose 17.6% (or $44 billion) from a year earlier to $292 billion at the close of 2014. This followed a 16.6% (or $35 billion) increase in 2013.
Contributions and investment income of pension plans continue to grow
Pension plan contributions grew 4.1% in 2014, following a 5.3% gain in 2013. In 2014, contributions grew 5.2% for employer-based plans, 3.5% for individual registered savings plans and 2.9% for social security plans.
In 2014, the investment income of pension plans rose 5.0%. Gains occurred in all three pension tiers: employer-based pension plans, individual registered savings plans and social security plans.
Withdrawals from pension plans rose 5.4% in 2014, following a 5.7% gain in 2013. The slower pace was attributable to weaker growth in two of the three pension tiers. Employer-based pension plans rose 5.6% in 2014, following a 6.6% increase in 2013. Social security plans increased 3.9% in 2014, following a 4.5% gain in 2013. Conversely, individual registered savings plans rose 8.4%, following a 7.0% gain a year earlier.
Pension plan contributions and investment income combined grew 4.4%, following a 4.1% gain in 2013. Revaluations added $173 billion to pension wealth in 2014, down from a $185 billion addition to pension wealth in 2013.