Key Takeaways
- • Mercer's CFA Institute Global Pension Index score for Canada rose from 68.4 in 2024 to 70.4 in 2025, a 1.8-point gain that Mercer's Hubert Tremblay attributes to data updates and measurement changes rather than structural reform.
- • Tremblay identifies private sector pension coverage as Canada's most pressing retirement challenge, with fewer than 10 per cent of private sector workers enrolled in defined benefit plans versus about 80 per cent of public sector workers.
- • Tremblay argues employers should act as facilitators through group savings structures that lower fees, and that governments should use incentives rather than mandates for employer contributions.
- • Tremblay warns that adding policy constraints on pension funds, such as directing assets toward domestic infrastructure, could impair fiduciary duty to maximize member returns.
Summary
Canada's pension system rose in Mercer's CFA Institute Global Pension Index, from 68.4 in 2024 to 70.4 in 2025. According to Hubert Tremblay, partner and senior wealth advisor at Mercer Canada, the gain reflects updated data and improved measurement rather than structural changes. He cited the debt-to-GDP measure, which improved Canada's score because of economic developments, not policy reform.
Tremblay identified private sector pension coverage as the most pressing challenge facing Canada's retirement system. Fewer than 10 per cent of private sector workers are enrolled in defined benefit plans, and uptake of defined contribution plans is limited. By contrast, about 80 per cent of public sector workers have defined benefit coverage. He said expanding access should be a national priority and noted that low personal savings compound the coverage gap, citing rising housing costs and inflation as obstacles to saving despite a favourable tax environment.
Tremblay said that improving outcomes does not require mandating employer contributions, which he described as politically and economically unlikely, but does require employer involvement. He pointed to group savings structures, which lower investment fees and improve efficiency through pooled participation, as a cost-effective option even for employers that prioritize salary over pension benefits. He also emphasized financial education and the use of technology for forecasting and planning tools.
On the role of government, Tremblay said authorities seeking to draw on pension assets for economic development should "put some incentives and not constraints" and "ask and not mandate." He warned that additional constraints could affect pension funds' fiduciary duties, as Ottawa's growing interest in domestic infrastructure investment places pressure on that balance. He said plans should evaluate such opportunities on risk, return and diversification, consistent with their global approach.
Tremblay concluded that Canada has a strong retirement foundation, citing the scale of assets set aside relative to many countries and the governance of the CPP and La Caisse. He said the priority now is understanding how best to use those assets.
Tremblay identified private sector pension coverage as the most pressing challenge facing Canada's retirement system. Fewer than 10 per cent of private sector workers are enrolled in defined benefit plans, and uptake of defined contribution plans is limited. By contrast, about 80 per cent of public sector workers have defined benefit coverage. He said expanding access should be a national priority and noted that low personal savings compound the coverage gap, citing rising housing costs and inflation as obstacles to saving despite a favourable tax environment.
Tremblay said that improving outcomes does not require mandating employer contributions, which he described as politically and economically unlikely, but does require employer involvement. He pointed to group savings structures, which lower investment fees and improve efficiency through pooled participation, as a cost-effective option even for employers that prioritize salary over pension benefits. He also emphasized financial education and the use of technology for forecasting and planning tools.
On the role of government, Tremblay said authorities seeking to draw on pension assets for economic development should "put some incentives and not constraints" and "ask and not mandate." He warned that additional constraints could affect pension funds' fiduciary duties, as Ottawa's growing interest in domestic infrastructure investment places pressure on that balance. He said plans should evaluate such opportunities on risk, return and diversification, consistent with their global approach.
Tremblay concluded that Canada has a strong retirement foundation, citing the scale of assets set aside relative to many countries and the governance of the CPP and La Caisse. He said the priority now is understanding how best to use those assets.
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