Value of pensions plans drop in 4thQ 2008 following six consecutive quarters of gains
Ottawa (12 September 2008) – Canadians with trusteed pension plans saw their retirement savings drop slightly in the first quarter of 2008, following six consecutive quarters of gains, according to Statistics Canada.
The market value of pension fund assets declined 0.9% to $957.1 billion from $966 billion at the end of 2007. This reflected a decline in stock prices, as well as reduced income during the first quarter. The Toronto Stock Exchange closing composite index for the same period was down 4.9%.
Based on market prices, stocks and equity funds accounted for 36.4% of total pension fund assets in the first quarter, down from 39.8% in the first quarter of 2007 and 37.2% in the fourth quarter of 2007.
The proportion of pension funds held in bonds rose to 34.5%, while the percentage in real estate increased to 7.4%. Short-term investments accounted for 3.1%, and mortgages 1.5%. The remaining assets, which include pooled foreign funds, accounted for 17.1%.
The split between foreign and domestic holdings remained unchanged at 69.9% for domestic and 30.1% for foreign.
Pension fund revenues declined 46.7%, while expenditures rose 43.4%. Revenues of $18.8 billion and expenditures of $19.8 billion resulted in a negative cash flow of $1 billion, the first in five years.
Pension benefits paid to retirees in the first three months of 2008 grew 6%, reaching a high of $9.1 billion. For the third quarter in a row, benefits paid to retirees have exceeded pension contributions made by employers and employees