Did you know that your HOOPP pension is doing more than just securing your retirement? According to a recent study by The Conference Board of Canada (CBoC) commissioned by HOOPP, OPTrust and the University Pension Plan (UPP), retired members make significant contributions to the economy, in Ontario and across Canada.
In 2023, DB pension plans including HOOPP, supported more than one million pensioners in Ontario and their pension benefits contributed over $34 billion to Ontario’s gross domestic product (GDP) – more than 3% of the province’s total GDP, according to the CBoC report titled Defined Benefit Pension Plans: Supporting Ontario’s Economy.
The economic impact of defined benefit pension plans
DB plans, like HOOPP, not only provide members with a secure retirement income but also positively impact all Ontarians through the significant contributions that members like you make to local economies.
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 spending. This benefits local businesses like stores and restaurants, creates jobs and generates significant revenue for all levels of government, stimulating overall economic growth.
The report found that DB pension plans paid out more than $42 billion in benefits to over 1.2 million Ontarians. These payouts account for 71% of all retirement income from employer and personal pensions and savings plans (excluding public sources) in the province. This payout is roughly equivalent to the total wages paid in Ontario’s construction, accommodations and food services sectors combined. It also found that on an annual basis, DB pension benefits generate over $17 billion in government revenue within the province.
The report also highlighted some of the many ways DB pensions contribute to economic growth:
- DB pensions have a vital impact at the community level, supporting you as well as local workers and businesses. Benefits paid to retired members in DB plans supported over 250,000 full-time, full-year jobs in Ontario, generating more than $16 billion in labour income and benefits in 2023.
- On average, each dollar of DB pension payouts generated $1.43 in economic output for Ontario in 2023. The total economic output from DB pension payouts was more than $60 billion within the province.
The importance of advocacy for DB pension plans
While the CBoC’s research shows the positive economic impact from DB pension payouts, the report also reveals the percentage of workers covered by DB pensions is much lower than it was two decades ago. In 2023, only 26% of all employed workers in Ontario were members of a DB pension plan, down from 35% in 2003.
HOOPP remains committed to advocating for a more secure retirement for all Canadians and exploring how pensions impact you, your communities and the broader economy.
For more information on the economic impact of DB pension plans, we encourage you to access the full report.