Retirement solutions Canada Fact book 2017

Increasing life spans, the trend away from defined benefit (DB) pensions and lower and more volatile investment returns makes saving for and income security throughout retirement a challenge for Canadians. Annuity products and other innovative solutions offered by life insurers provide an excellent way of meeting retirement needs. There are two stages to an annuity:

1. Accumulating annuities provide a secure investment vehicle for pension plans, RRSPs, TFSAs, and non-registered funds during the savings stage.

2. Pay-out annuities can provide guaranteed income for life, just like a DB pension. Only life insurers can guarantee income for life.

84% of annuity premiums are invested in segregated funds.

Annuities provide a range of investment options for consumers. Variable annuity products, with benefits linked to the performance of an underlying portfolio of assets, are backed by segregated funds. Younger Canadians continue to focus on wealth accumulation and

retirement planning through these market-value-based products.

Assets supporting retirement products

$43.5B in retirement benefits

Retirement benefits grew at an average annual rate of 5% over the past decade.

Canadian pension landscape

Canada's pension wealth, including all three components noted below, reached $3.5 trillion at the end of 2015 (according to Statistics Canada Pension Satellite Account, 2015). This includes $631 billion in assets held by about 15,900 private employer-based plans which provide retirement protection for more than 3 million Canadians.

*This includes employees at all levels of government

Employers offering DB pensions transferred $2.6 billion of pension risk (longevity and/or investment) to life insurers in 2016. The trend toward de-risking pension plans is anticipated to accelerate as employers increasingly reduce risk and focus on their core business.