Pension Plan Funds Up in Q2

By Andrew Rickard | December 18 2014 08:42AM

According to data released by Statistics Canada last week, the market value of Canadian employer-sponsored pension funds increased in the second quarter of 2014 and now stands at $1.4 trillion. This is the fourth consecutive quarterly gain.

Statistics Canada says that the value of bond holdings increased 4.2%, while real estate investments were up by 3.3%, the value of mortgages rose 2.4%, and stocks were up by a slim 0.1%. Statistics Canada also notes that foreign investments in Canadian pension funds accounted for 32.8% of total pension fund assets.

Although pension fund revenue grew 2.2% in the second quarter to $40.2 billion, employer contributions declined by 4.2%, and profits from the sale of securities dropped by 8.6%. These losses were offset by a 13.7% increase in investment income. Pension plan expenditures also decreased in the second quarter of 2014, down by 4.1%.

With the increase in revenue, Statistics Canada says that pension fund net income came to $23.5 billion in the second quarter; this represents an increase of 7.2%.

"Over 6.2 million Canadian workers are members of employer-sponsored pension plans. Of this group, 5.2 million (83.6%) workers belong to pension plans with assets managed by trusteed funds," says Statistics Canada. "The remaining members have assets managed by insurance company contracts."