The value of Canadian employer pension funds surpassed the $1 trillion mark ($1.05 trillion) for the first time during the fourth quarter, a 5.1% increase from the third quarter.
Employer pension funds have not only recovered from losses experienced during the 2008 financial crisis, they have also posted two consecutive years of double-digit gains. After falling 13.1% in 2008, pension fund assets rose 10.5% in 2009 and 14.4% in 2010.
Pension fund investments in bonds rose 1.7% to $372.3 billion in the fourth quarter. At the same time, pension fund investments in stocks increased 6.5% to $354.7 billion, following a third-quarter increase of 10.0%.
As a result, the proportion of total pension fund assets held in bonds edged down to 35.5%, while the proportion held in stocks increased to 33.8%.
The share of pension fund assets in domestic holdings rose slightly to 70.7%, while the share in foreign holdings declined to 29.3%.
Pension revenues increased 59.1% in the fourth quarter to $35.0 billion, following a 9.1% decline in the third quarter.
Revenues increased as a result of special payments made by employers to cover pension liabilities, increased investment income from year-end dividend payments and net profits from the sale of securities.
Expenditures in the fourth quarter were up 3.3% to $13.9 billion. However, with revenues of $35.0 billion, net income increased to $21.1 billion, from $8.5 billion in the third quarter.
Just over 6.0 million Canadian workers are members of employer pension plans. Of this group, 5.0 million workers are members of trusteed plans. The remaining 1.0 million members with employer pensions are in plans managed principally by insurance company contracts. Data in this release refer only to trusteed plans and their pension funds.