The Healthcare of Ontario Pension Plan (HOOPP), OPTrust and University Pension Plan (UPP) commissioned the Conference Board of Canada to analyze the economic impact of defined benefit (DB) pension plan payouts to Ontarians.

DB pension plans provide retirees with a secure and predictable monthly stream of income that they know they will earn for life. This financial certainty allows retirees to spend with confidence and plan to enjoy their retirement within their financial means. In 2023, over one million Ontarian pensioners and their families were supported by DB retirement benefits. The analysis shows that DB pension plans not only impact individuals and family but also serve as a powerful driver of Ontario’s economy.

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 like 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 GDP.

The analysis also found that:

Breakdown of spending and taxes paid by beneficiaries of DB pension plans in Ontario

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 per cent, 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.

In today’s environment, where many Canadians feel unprepared for retirement and struggle to save due to the rising cost of living, DB pensions not only offer financial stability and peace of mind by alleviating some of the stress around retirement planning, but also drive significant economic growth.

*from employer and personal pensions and savings plans (excluding public sources).