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A report published by the Conference Board of Canada and commissioned by UPP, the Healthcare of Ontario Pension Plan (HOOPP), and OPTrust examines the economic impact of defined benefit pension plans provincially and nationally.
As a defined benefit (DB) pension plan, UPP proudly serves over 40,000 members from universities and affiliated organizations across Ontario, providing a secure and predictable income stream for life based on years of service and earnings. A new report highlights the positive effects of DB pension plans extend well beyond individual households, benefiting the broader economy.
Published today, “Defined Benefit Pension Plans: Supporting Ontario’s Economy” delves into the economic impact of DB pension plans in Ontario. The research highlights the critical role of these plans in supporting Ontarians, both in terms of retirement and broader economic growth including driving consumer spending, stimulating business growth, supporting jobs, and generating tax revenues at all levels of government.
Key findings
- 71% of retirement income in Ontario is from DB pension plans.*
- 98% of the DB pension payments spent by beneficiaries are spent within Canada.
- 90% of active DB pension plan members in the province are enrolled in Ontario-registered plans.
*From employer and personal pensions and savings plans (excluding public sources).
In 2023, DB pension plans supported over one million Ontarian pensioners and their families. The research suggests that retirement dollars paid from DB pensions allow plan members to feel confident about having a steady income in retirement and in turn, drives consumer spending. This benefits local businesses including stores and restaurants, stimulates business growth and supports more than 250,000 full-time, full-year jobs in Ontario, generating over $16 billion in labour income and contributing more than $34 billion, or more than 3%, to the province’s gross domestic product (GDP).
Why this matters
- In 2023, over $42 billion in pension benefits were paid to an estimated 1.23 million people in Ontario
- Of this total, approximately 20%, or $8 billion, came from contributions by employees and employers, while up to 80 per cent, or $34 billion, came from investment returns.
- This financial activity generated more than $60 billion in economic output, including spending, taxes, and the buying and selling of goods within Ontario.
- Ontario’s DB pension plans held more than $770 billion in assets in bonds, equities, infrastructure, real estate and other investments in Canada and internationally in 2023.
DB pensions like UPP not only offer income stability and peace of mind by alleviating some of the stress around retirement planning, but also drive significant economic growth. As a sector-wide plan, our purpose is to bring greater retirement peace of mind to Ontario’s university community.
“We know the invaluable role the university sector plays in shaping our collective future through education, research, and innovation. This is why we strive to provide our members with the pension security they deserve.”
Barbara Zvan
President and Chief Executive Officer, UPP
Media Contact
Kelly Conlon
Managing Director, Strategic Communications and External Relations
[email protected]
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