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The most current pension and investment information available in Canada, located in these easy to use directories. Click on any logo for information.
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Funds end 2002 with worst returns since 1970
29-01-2003
Jeff Sanford
A new Mercer Investment Consulting report has found that Canada's pension funds put in a miserable performance in 2002.
According to the report, balanced pooled funds returned an average of -4.6% in 2002, the worst performance since 1974.
Pension funds actually did slightly better than the broad indexes. In 2002, median return from Canadian equity managers was -9.8%, which was 2.6 percentage points better than the Standard & Poor's/Toronto Stock Exchange Composite Index.
According to Marcel Larochelle, a practice leader with Mercer, this is the second year in a row that median balanced fund return has been well below typical long-term expectations. "For many years, pension plans enjoyed an improvement in their financial situation because equity markets were strong. However, when markets are weak, it can be painful," said Larochelle.
Mercer's Canadian Pension Health Index, a measure of the asset to liability positions of Canadian pension funds, indicates that the typical pension fund is 15% worse off in terms of its asset to liability correlation than it was at the beginning of 2002. Since the beginning of 2001, the index is off 21%.
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