Pensions and retirement savings of families

Are Canadian families better prepared for retirement today than in the past? Since the late 1970s, the proportion of employees covered by a registered pension plan (RPP) has dropped (Chart A)—the decline in coverage by defined-benefit RPPs more than offsetting growth in coverage by defined-contribution plans. Over the 1978 to 2005 period, male employees saw their RPP coverage decrease by almost 15 percentage points while female employees enjoyed little growth in coverage. However, the stagnation for women masks two opposing trends. Between the mid-1980s and the mid-1990s, RPP coverage fell slightly among women aged 25 to 34 but rose among those aged 35 to 54 (Morissette and Drolet 2001). However, the individual-level data cannot be used to assess whether families are better prepared for retirement now than in the past. That depends, among other things, on changes in the degree to which men and women with high earnings and good RPP coverage marry each other. For instance, the share of couples with at least one RPP might not have fallen over the last two decades if some men who experienced a drop in RPP coverage married women who experienced the opposite. This notion is more than a remote possibility. Decades ago, women married to high-income men typically did not work outside the home, while those married to lower-income men often did so to alleviate very tight family budgets.