stock market / sefa ozel

As markets wobbled in the second quarter, pension assets stumbled, according to new data from Statistics Canada.

The national statistical agency reported that the market value of employer pension plans dropped by 5.4% in the second quarter to $2.1 trillion — a decrease of $119.3 billion.

The decline came amid equity market turmoil, with the S&P 500 down 10.9% in the quarter. Pensions’ equity holdings were down 7.1% in the second quarter, and bonds were down just as much — 7.2%, StatsCan reported.

Alternative asset categories, such as infrastructure and real estate, recorded gains in the second quarter, with assets in these categories up 3.1% and 2.2%, respectively.

Despite the second-quarter drop in overall assets, StatsCan noted that pension assets remained above their pre-pandemic levels, when the market value of assets was $2.0 trillion.

Alongside the weakness in assets, pension fund revenues also plunged in the second quarter.

StatsCan reported that total revenue dropped by more than half (51.2%) to $25.0 billion, “mainly because of net realized losses,” which accounted for virtually all of the decrease.

While revenues were down, pensions’ expenditures rose by $2.0 billion in the second quarter — up 7.4%, it noted.

This combination of a drop in revenues and a rise in spending resulted in pension funds recording a $3.4-billion net loss in the second quarter, compared with positive net income of $24.7 billion in the first quarter.