The market value of assets held by Canadian trusteed pension funds rose to $1.9 trillion in the first quarter of 2018, up from about $1.85 trillion in the fourth quarter of 2017, according to new data from Statistics Canada.
The increase represents a rise of three per cent from the fourth quarter of 2017 and 5.7 per cent year over year. The largest rise was in short-term securities investments, which was up 6.1 per cent in the first quarter of 2018, from $79 billion to $83.8 billion. This was followed by investments in mortgages, which rose 4.2 per cent to $28.6 billion.
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The value of bond holdings grew 2.7 per cent in the first quarter to $601.3 billion while holdings in stocks grew 2.6 per cent to $577.2 billion, according to Statistics Canada. Foreign investments, which represented 37.6 per cent of total holdings, also increased in the first quarter, rising 5.1 per cent to $713.5 billion. Investments in foreign bonds rose 10.9 per cent and foreign stock holdings saw a boost of 6.8 per cent.
Despite the increases, pension fund revenue dropped 30.4 per cent in the first quarter to $42.4 billion, which Statistics Canada attributes in part to lower revenue from non-contributions. There were also decreases in profit on the sale of securities, which dropped 48.6 per cent to $12.2 billion, as well as investment income, which dropped 24 per cent. Contribution revenue was also lower, down nine per cent in the quarter.
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Expenditures also decreased in the quarter, declining 9.1 per cent. Pension payments, which Statistics Canada found accounted for more than two-thirds of all expenditures, dropped 3.5 per cent and administrative costs held relatively steady, decreasing by just 0.6 per cent.
In all, net income across Canadian trusteed pension funds decreased 44.7 per cent to $20.2 billion in the quarter.
The data also showed more than 6.2 million Canadians belonged to employer-sponsored pension plans, with 82.7 per cent belonging to pension plans with assets managed by trusteed funds.