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National Pension Hub Publications

Future Pension Plan Adequacy in a Changing World

To significantly improve the assessment of future retirement income adequacy, in a highly granular fashion and using tools that update and significantly improve on previous work in the area, including through the incorporation of detailed pension coverage and saving sources as well as of several sources of uncertainty.

In years past, several studies have attempted to quantify retirement income adequacy in Canada. Most used differing methodologies, often difficult to reproduce or to assess in detail, and offered varying answers – but always by using cut-offs or thresholds. Our project proposes to assess adequacy by A) incorporating all sources of savings in our modelling at the individual level, using the most up-to-date and detailed data available; and B) quantifying and incorporating several sources of future uncertainty using practitioner input. The result will which individuals are likely to be adequately prepared, which is of utmost importance for policy and product design.

The team will use and further develop existing sophisticated microsimulation tools to build projections of future retirement income that account for pension plan coverage and type, most types of savings as well as housing. The modelling of 3rd and 4th pillars savings and housing that will be incorporated in the model built by the Industrial Alliance Chair, held by Michaud, will be the most detailed to date. Future sources of uncertainty will be assessed through expert panel discussions as well as data analysis, and incorporated into the model. In contrast with previous work, a probabilistic approach will be used to generate complete distributions of outcomes with corresponding probabilities.

Summarize the expected outcome of this work:

We anticipate 3 main outcomes:

- A better understanding of what drives future pension plan adequacy, key uncertainties and prospects for improvements in coverage (in terms of product development and public policy), in the form of scientific and policy publications as well as of a report be produced for the NPH.

- A readily available and transparent modelling tool to assess retirement income adequacy that will be made available to researchers through a general public license (GPL) agreement, with a potential for anyone to look “under the hood” of the machinery producing our estimates.

- A visual tool allowing users to perform real time scenarios on-line regarding retirement adequacy. Examples of visualization tools produced as part of the Chair’s work can be found at



HEC Montréal


Pierre-Carl Michaud



Pierre-Carl Michaud

Pierre-Carl Michaud is a professor of economics in the applied economics department of HEC Montreal. He holds the Industrielle Alliance Research Chair on the Economics of Demographic Change and is Director of the Retirement and Savings Institute at HEC.

His research aims to understand life-cycle behavior along a number of dimensions including savings, insurance and pensions, as well as health investments and the economic consequences of demographic change. He has received funding from numerous organizations for this work and his research has been published in top economic journals in economics, demography and public