Statistics Canada has recently refined the Survey of Financial Securitys (SFS) initial estimate of net worth by adding to it an estimate of the value of benefits accrued in employer pension plans (EPPs). This represented the first time that these benefits were estimated by a Canadian asset and debt survey.
Pension benefits are an important addition to any asset and debt survey as, for many family units, it represents their largest asset. With the aging of the population, information on pension accumulations is greatly needed to better understand the financial situation of those nearing retirement.
This document describes the methodology for estimating that value, for the following groups: a) persons who belonged to an EPP at the time of the survey (referred to as current plan members); b) persons who had previously belonged to an EPP and either left the money in the plan or transferred it to a new plan; c) persons who are receiving EPP benefits.
This methodology was proposed by Hubert Frenken (former Statistics Canada employee, now private consultant specializing in pension issues) and Michael Cohen (principal with the actuarial firm William M. Mercer).
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