(July 17 – 12:00 ET) – StatsCan today released statistics that show that assets of Canada’s 15,213 employer pension plans were the fastest growing major retirement income program between 1996 and 1998. In that period, employer pension plan assets increased 22.0% to an estimated $644.4 billion. During the same period assets in RRSPs grew only 7.8% to $241.1 billion, and the combined assets of the Canada and Quebec pension plans declined 4.3% to $49.4 billion.
In total, the assets of all retirement income programs were estimated at $935 billion at the end of 1998, up 16.4% from 1996. Employer pension plans accounted for 68.9% of the total, RRSPs 25.8% and the CPP/QPP 5.3%.
Trusteed pension funds are second only to the chartered banks in size, making them a major force in capital and financial markets. In 1998 about 5.1 million employees belonged to employer pension plans, three-quarters of them in trusteed funds.
These plans are increasingly shifting their assets into stocks. Equities are now the largest component of the funds’ investment portfolio at 33.9%, up from 29.1% in 1990. Bonds dropped from 45.2% to 31.1% of the portfolio over the same period. These investments are also approaching foreign content limits, with about 17% in foreign assets.
Higher returns are the primary reason for the move toward equities, and it’s paying off. In 1998, the return for trusteed pension funds was 9.4%, up from a low of 7.4% in 1994. They reached their high of 11.8% in 1997.
-IE Staff