Employer pension plans (trusteed pension funds) Third quarter 2006: StatsCan

The value of retirement savings of 4.6 million Canadian workers with trusteed pension plans rebounded between July and September last year, following its first decline in seven quarters.

Market value of assets amounted to $854.9 billion in the third quarter of 2006, up 4.4% from the second quarter. This followed a 2.1% decline in the previous quarter, which reflected the performance of Canadian stocks in the Toronto Stock Exchange.

Over 40% of the value of funds assets were held in stocks and equity funds in the third quarter. Bonds and bond funds accounted for 33%, real estate 6%, short-term investments 4%, mortgages 1% and other assets 16%.

Pension fund assets in foreign holdings have increased 5% in the last two years. Investments in foreign holdings, particularly stocks, now account for 29% of pension funds assets, while the proportion of domestic holdings has declined to 71% since the first half of 2005.

Revenues amounted to $20.7 billion in the third quarter, and expenditures $9.8 billion, for a net income of $10.9 billion. This was down from net income of $17.6 billion in the previous quarter.

The decline reflects losses on the sale of securities and a 26% reduction in employer contributions following large special payments for unfunded liabilities in the previous two quarters.

Pension benefits paid to retirees climbed to $7.5 billion in the third quarter. Benefit payments have been increasing steadily over the last few years. Year-to-date payments are up 6% over values in 2005 and 7.5% over 2004.

About 4.6 million Canadian workers are members of trusteed plans. Of these, 2.5 million are public sector workers in municipal, provincial, and federal governments and enterprises, crown corporations, government boards, commissions and agencies, and public educational and health institutions. Private sector workers make up the remaining 2.1 million.

A further one million workers have employer pension plans funded by government consolidated revenue funds, or by insurance company contracts. (Data in this release refer only to the trusteed plans, and all values are in current dollars).

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