CPP Investment Board says long-term outlook remains stable despite setbacks caused by turmoil in international economic markets.
Ottawa (25 May 2009) - The Canada Pension Plan fund lost $17.2 billion in the fiscal year ending March 31, 2009.
The total equals 18.6% of the fund's entire value, which shrank to $105.5 billion compared to $122.7 billion a year earlier. The plan actually suffered investment losses totalling $23.6 billion but this was partly offset by CPP contributions of $6.6 billion.
The plan manages pensions on behalf of 17 million contributors and beneficiaries.
Market turmoil caused the losses. Real estate investments plunged 44% while Canadian and emerging market equities each dropped 32%.
David Denison, CEO of the CPP Investment Board (CPPIB), said the plan remains stable despite the setback and is well-positioned to meet obligations "for decades and generations to come.”
CPP contributions are expected to exceed annual benefits paid through to the end of 2019, the board said.
If the plan can make an average 4.2% real rate of return over the long term, contribution rates will not have to be raised, the chief actuary of Canada has said. The four-year rate of return through March 31 was 1.42%. Since the board began investing a decade ago, the 10-year annualized rate of return has been 4.3%.
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