Economic Impact of British Columbia’s Public Sector Pension Plans

The Conference Board of Canada, 48 pages, October 16, 2013
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Which pension plans in Canada are considered optimal? This study reveals that British Columbia’s public sector pension plans result in higher contributions to retirement savings than do RRSPs.

Document Highlights

There is ongoing debate in Canada about optimal pension design. In the Economic Impact of British Columbia’s Public Sector Pension Plans, we compared the average B.C. retirement saver to a typical B.C. public sector pension plan retirement saver. The key difference between these two groups is that the B.C. public sector pension plan saver is covered by a comprehensive defined benefit plan, which effectively removes the discretionary aspect of retirement saving.

The study reveals that B.C.’s public sector pension plans result in higher contributions to retirement savings than RRSPs. If B.C. public sector plan members saved the same as typical RRSP savers in the province, they would accumulate about $2.2 billion less in savings every year. In terms of the overall economy the public sector plans lead to a larger savings pool for investment, which raises the capital stock in the economy.

Table of Contents

Executive Summary

Chapter 1—Introduction

  • About This Report

Chapter 2—British Columbia Public Sector Pension Plans—Context

  • Canada’s Retirement Income System
  • Design Elements
  • Positioning British Columbia Public Sector Pension Plans
  • Defined Contribution Plan Membership
  • Defined Benefit Plan Membership
  • Registered Retirement and Group Savings Plans
  • Where British Columbia Public Sector Pension Plans Fit In
  • Conclusion

Chapter 3—Economic Impacts

  • Approach
  • Fund Accumulation
  • Fund Management
  • Retirement Income
  • Impact on British Columbia Communities
  • Social Impacts
  • Conclusion

Chapter 4—British Columbia Public Pensions Plan Capital in Action

  • Breathing Life Into a British Columbia Brand: Delta Hotels and Resorts
  • Charging Up a Utility—Puget Sound Energy
  • Developing the Backyard—British Columbia Real Estate Holdings
  • Northwoods Business Park—2270 Dollarton Highway, North Vancouver
  • On Broadway—Tech Centre Home to Businesses
  • Best-Dressed Investment—lululemon athletica inc.

Chapter 5—Conculsion

Appendix A—About the Plans

  • How the BC public sector pension plans are governed
  • Role of the Board of Trustees
  • Role of the British Columbia Pension Corporation
  • Role of the British Columbia Investment Management Corporation (bcIMC)
  • Benefits
  • Pension Plan Accounts—How Benefits are Funded

Appendix B—Bibliography

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