New deposits to defined contribution (DC) plans in Canada grew by 26% between Q3 2018 and 2019, a report by the LIMRA Secure Retirement Institute concludes.
The survey Canadian Pension Market examined the sales results (annualized new deposits) of nine insurers: BMO Insurance, Brookfield Annuity, Canada Life, Co-operators, Desjardins Financial Security, Sun Life Financial, Industrial Alliance Life, Manulife and RBC Insurance. Brookfield, the most recent entrant, is a federally chartered insurer that specializes in group annuity solutions for pension plans. It is owned by Brookfield Asset Management.
In the first three quarters of 2019, new deposits to DC plans reached $697,733 million, compared with $554,045 million in the same period in 2018. The DC plans analyzed by LIMRA include registered pension plans, group RRSPs, Deferred Profit Sharing Plans (DPSPs), group TSFAs, Voluntary Registered Savings Plans and Pooled Registered Pension Plans (PRPPs).
More members, fewer plans
The number of pension plan participants climbed 9% between the first three quarters of 2018 and 2019, from 173,368 to 188,817. During the same comparison period, the number of new plans sank by 23%, from 4,721 in the first three quarters of 2018 to 3,656 at the end of Q3 2019.
Several new RRSPs
Group RRSPs accounted for 52% of the group plans set up in the first three quarters of 2019, and DC plans made up 8%.
Defined contribution plans lead in assets under management, controlling 54%, compared with 37% for group RRSPs.
VRSPs and PRPPs: marked slowdown
LIMRA portrays Voluntary Registered Savings Plans and Pooled Registered Pension Plans as only a drop in the bucket. They represent less than 1% of the total defined contribution plan market. The solutions launched in the mid-2010s comprise 8% of new DC plans in Canada in the first three quarters of 2019, a steep plunge from 28% in the same period in 2018.
