Pension Growth Stalls in Q3

This situation is explained by a weaker stock market and the rising Canadian dollar, which hindered gains in foreign stock holdings.

The value of Canadian stocks on the Toronto Stock Exchange declined 1.6% and the value of foreign equity investments dropped 3% after currency conversion while the value of bonds rose 2.1%.

At the end of September, pension fund assets held in stocks and equity funds accounted for 39.1% of total assets; bonds and bond funds represented 32.0%; real estate was 6.6%; short-term investments were 3.6%; mortgages accounted for 1.4%; and other assets represented 16.9%.

“Pension revenues declined to $28.3 billion, after peaking in the previous quarter at $34.7 billion,” says Statistics Canada. “This decline was due to reduced employer contributions, investment income and profits from buying and selling stocks.”

Expenditures were up 5.9% to $12.9 billion, mostly due to losses on the sale of securities and restructuring costs. Pension benefits paid to retirees rose a marginal 0.3% to $8.4 billion. Net income declined to $15.4 billion from the record high $22.6 billion in the second quarter.

Of the 5.7 million Canadian workers belonging to employer pension plans, 4.6 million are members of trusteed plans. The remaining 1 million workers with employer pension plans are covered by the consolidated revenue funds of the federal and provincial governments, or by insurance company contracts or Government of Canada annuities.

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