|Author||Moore, Kevin D.|
|Journal||Canadian Labour and Employment Law Journal|
This paper applies a statistical analysis to quantify the impact of the ongoing shift in Canadian workplaces from defined benefit pension plans to defined contribution pension plans. The basis for the analysis is Statistics Canada's LifePaths model, which aims to simulate the life experiences of "synthetic individuals" to whom are assigned characteristics which are rep- resentative of the Canadian population, as identified by census, survey and administrative data. The authors conclude that the shift from DB plans to DC plans has a significant negative impact on pre-tax registered pension plan (RPP) income. The losses are considerably smaller when the focus of analysis moves to total income and net after-tax income. However, because much of what reduces the larger gross effect of lost RPP income is lower personal income taxes, the trend from DB to DC involves a fiscal impact, by generating upward pressure on public expenditures. The authors emphasize that the results of this study reflect the attributes of DC plans as they have existed until now, and not as they might exist in a reconceptualized form.