Registered pension plans (RPPs) allow employed individuals to enjoy retirement income. Unfortunately, the proportion of employed individuals participating in an RPP was only 37% in Canada in 2019, making increased coverage rate a challenge for Canadian society. RPPs enable employed individuals to have an adequate standard of living and governments to save on support measures for low-income individuals. In line with governmental public policy goals, the establishment of RPPs in certain workplaces can be encouraged or organized by the State. By better understanding the establishment of the Régime de retraite pour les personnes salariées des centres de la petite enfance et des garderies privées conventionnées du Québec (RRCPEGQ)¹, it is possible to see how a similar project could occur in other sectors of the economy.

In the early 2000s, the RRCPEGQ was created to cover early childhood educators working in the field of childcare services. To better recognize the workforces’ contribution in daycares, a defined benefit pension plan was established for the 23,000 staff members working in these establishments at that time. The scheme applied to over 1,400 workplaces. Today, nearly 55,000 educators participate in the RRCPEGQ. Most of them are women. The establishment of the RRCPEGQ was in line with the government's aim to create a policy supporting families. During the establishment of the scheme, there were discussions about incorporating these new participants into the pension plan of the Quebec public service and education and health networks, but the solution of an original scheme exclusively for daycares was advocated. Representatives of employer and labor associations participated in the development of the RRCPEGQ, along with government officials. Arguments such as greater stability in this sector, improved working conditions for low-income workers, retention and attraction of staff and enhancement of services were put forward to create the pension plan and improve social benefits.

The same arguments apply to other sectors of activity. Public policy attention is turning towards the issue of the coming decades: population aging and care for the elderly. The number of very elderly individuals, aged 85 and over, has gradually increased over time to represent a growing share of the Canadian population. In 2021, the Canadian population included approximately 871,400 individuals aged 85 and over. In the foreseeable future, the aging of the population will cause the number of people aged 85 and over to skyrocket over the coming decades, reaching between 2.8 million to 3.6 million people in 2068 depending on the scenarios². These individuals will need care to age with dignity.

In addition to the announcement of the establishment of new frameworks for variable payment life annuities in the federal budget of 2023, the Government of Canada also put forward a proposal with the objective to "develop and test innovative solutions to strengthen the retirement savings of personal support workers without workplace retirement security coverage"³ As a result, Employment and Social Development Canada (ESDC) will receive $50 million in funding over five years to carry out this project until 2027-2028. Support staff in the private sector, many of whom are women (86%) do not necessarily have a pension plan in their workplace. Immigrants and racialized people are also overrepresented⁴. Here too, like the RRCPEGQ, the argument for better care, greater workforce stability and a larger pool of personal support workers is used to justify the investment of public money in improving the working conditions of employees in this sector.

Many workplaces hire personal support staff, such as the senior’s residence sector, companies offering home support or private long-term care residences, whether for-profit or nonprofit organizations. Personal support workers are not the only ones employed in these workplaces. Indeed, these establishments hire staff for tasks such as cooking and meal service, leisure activities, housekeeping, nursing, administration, or maintenance, for example. If multi-employer plans are advocated for this sector of activity, personnel movements will be smoother thanks to the portability of accumulated pension rights. Workers in the public sector are often already covered by a defined benefit pension plan. In the context of labour shortages and competition between the public and private sectors for personnel, the generosity of public sector pension plans is an important lever for improving the working conditions of employees in the private sector.

Several questions about this nascent project can thus be raised. How will ESDC involve stakeholders? What type of plan will be advocated? Will it primarily involve multi-employer pension plans or single-employer pension plans? How will the results of this initiative be evaluated? Will provincial regulatory and oversight bodies be involved? Will this be a pioneering initiative leading to improved coverage in other sectors of activity subsequently? How could the community of insurance companies and actuarial firms mobilize to increase coverage of pension schemes while expanding their customer base?

Highlighting the genesis of the RRCPEGQ allows us to see the path that the establishment of new pension plans covering a particular sector of activity and tens of thousands of employees can take. Future schemes will be implemented in the personal care and senior services sector through a partnership between ESDC and private sector businesses in this industry in the coming years. This also sheds light on one of the ways to improve the low coverage rate of RPPs in Canada and to envision similar developments in other sectors of activity.

1 Could be translated as : Retirement Plan for Employees of regulated daycares in Quebec

2 Statistics Canada. (2022). Population Projections for Canada (2021 to 2068), Provinces and Territories (2021 to 2043). Spotted at : https://www150.statcan.gc.ca/n1/pub/91-520-x/91-520-x2022001-eng.htm

3 Canada Government. (2023). Budget 2023 : A Made-in-Canada Plan. P.57. Spotted at : https://www.budget.canada.ca/2023/pdf/budget-gdql-egdqv-2023-en.pdf

4 Canada Government. (2023). Budget 2023 : A Made-in-Canada Plan. P.295. Spotted at : https://www.budget.canada.ca/2023/pdf/budget-gdql-egdqv-2023-en.pdf 

Riel Michaud-Beaudry, Policy analyst, Observatoire de la retraite

Riel Michaud-Beaudry is a research professional at l'Observatoire de la retraite, a project of l'Institut de recherche en économie contemporaine. He completed a bachelor's degree in sociology and a master's degree in public affairs at Laval University. In addition to having published works on retirement in Quebec and Canada, he has conducted research in the fields of urban development, economics, social norms and public policies regarding electoral participation. He is the author of the book La retraite en commun. Fondements, enjeux et propositions

About l’Observatoire de la retraite

L’Observatoire de la retraite is an initiative of the Institut de recherche en économie contemporaine (IRÉC), which is aimed at organizations and people who want to better understand and act on the institution of retirement in Quebec. L’Observatoire brings together partners from different backgrounds who are keen to place debates on retirement in a broad perspective, that of social and economic policies.