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This was the third consecutive quarter that pension funds experienced a decrease in value.
Ottawa (14 September 2009) – Statistics Canada reports that the market value of retirement savings held in workplace pension funds declined $19.8 billion, or 2.4%, during the first quarter of 2009. This drop in value follows decreases of 8.7% in the third quarter and 6.7% in the fourth quarter of 2008.
Workplace sponsored pension funds amounted to $791.1 billion at the end of the first quarter of 2009, down $163.5 billion from a high of $954.6 billion at the end of 2007.
Tthe market value of stocks and equity funds accounted for 31.1% of total pension fund assets at the end of the first quarter of 2009, down from a high of 40.1% in the first quarter of 2006.
The proportion of fund assets held in bonds increased to 38.4%. Real estate investments accounted for 8.7% of total assets, mortgages, 1.8% and short-term investments, 4.0%. The remaining assets, which include pooled foreign funds, accounted for 16.0%.
Expenditures of $31.4 billion exceeded revenues of $17.6 billion in the first quarter for a negative cash flow of $13.8 billion. This was the third consecutive quarter that pension funds experienced a negative cash flow.
The negative cash flow resulted from continuing losses on the sale of securities, and reduced investment income and pension contributions, which both typically peak in the fourth quarter of each year.
Revenue from employer and employee contributions in the first quarter of 2009 amounted to $8.9 billion. Benefits paid to retirees reached $10.0 billion, exceeding pension contributions for a seventh quarter in a row.
The information is based on data Statistics Canada collects from a survey it does for its Quarterly Estimates of Trusteed Pension Funds.
In total, about 5.9 million Canadian workers are members of employer pension plans. Of this group, 4.8 million workers are members of trusteed plans. The remaining 1.1 million members with employer pension plans are managed principally by insurance company contracts.
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