Number of Canadians with pension plans jumped by 300K. Are you one of them?

According to Statistics Canada, the number of Canadians who were members of a registered pension plan grew by 293,500, or 4.2 per cent, from 2022 to over 7.2 million in 2023.

An additional 293,500 Canadians enrolled as members of a registered pension plan in 2023, Statistics Canada data released Tuesday showed.

According to a StatCan report, the number of Canadians who were active members of a registered pension plan (RPP) grew by 4.2 per cent to a total of roughly 7.2 million in 2023.

Of these, 4.9 million members were part of a defined benefit plan, which is a type of pension plan in which an employer or sponsor promises a specified pension payment, lump sum or a combination of the two on retirement.

In a defined benefit plan, the pension amount depends on an employee’s earnings history, tenure of service and age, rather than on individual investment returns.

This is in contrast to defined contribution plans, in which the employee’s pension benefits are determined by the size of their pension pot at retirement, rather than by a predetermined formula based on their salary and service.

Employees have control over investment choices, and the benefits are not guaranteed. The number of new members in defined contribution plans rose by 65,300 members, an increase of 5.1 per cent compared with 2022.

The number of Canadians enrolling in pension plans outpaced the employment growth rate. According to the Labour Force Survey, employment grew by 690,844, or 3.8 per cent, during the same period.

More women than men joined RPPs between 2022 and 2023. There were 150,700 more women with membership in an RPP, an increase of 4.2 per cent from 2022 to 2023, taking their number beyond 3.7 million.