For decades, retirement came with a steady paycheck for life.

But that era is fading fast.

With only 40% of private-sector workers still in defined benefit (DB) plans, most Canadians can no longer rely on the promise of predictable retirement income.

The shift to defined contribution (DC) plans has transferred the burden of income planning from institutions to individuals.

The message went from “you’ll be taken care of” to “you’d better have a plan.”

So how did we get in this mess?

DB Plans were simple - a percentage of your salary was reserved for retirement. The top salary was multiplied by the number of years you worked and that informed how much you would be getting every month.

The pressure fell on your employer and you didn’t have to worry about any changes because it was guaranteed.

And it worked for decades.

But as the system stretched to the limit, change was inevitable.

So what happened?

• People started living longer.
• Markets became more volatile.
• Companies began struggling with the longterm cost of guaranteeing income for retirees who might live 25 or 30 years past their working life.

In the eyes of employers, the math didn’t work out.

By the 1990s and early 2000s, the shift had begun. Companies started freezing DB plans for new hires or transitioning to what they called a “more modern” approach:

The defined contribution plan (DC).

The Retirement Flip: From Employer to Employee

Unlike a DB pension, a defined contribution (DC) plan doesn’t guarantee anything. It simply tells you how much will be contributed (by you, your employer, or both).

The outcome? That depends on how much you save, how your investments perform, and how long you live.

In other words: the risk is yours.

Now, individuals are pressured to ask:

• What happens if the markets crash the year I retire?
• How do I turn savings into income?
• How much do I need?
• Will it last?

It inevitably went from retirees worrying about how to spend their time to how to make their money last.

The days of widespread DB pensions are over.

But that doesn’t mean retirement security is out of reach.

It does mean we need a new mindset that encourages:

• Financial literacy.
• People planning their retirement earlier.
• Letting go of the emotional weight of having to “go it alone.”

It also means exploring other solutions like enhanced CPP benefits, hybrid pension models, or better tools for income planning in retirement.

Because while the guarantee may be gone, the goal hasn’t changed: a retirement that is secure, sustainable, and on your own terms.

Need help planning what retirement looks like for you?

Connect with us at pkagevents@cibc.com or call us at: 403-260-0469