The value of assets held by Canadian trusteed pension funds increased to $2.2 trillion in the fourth quarter of 2020, according to new data from Statistics Canada.
This was an increase of 4.7 per cent from the previous quarter, when the value of assets hit $2.12 trillion, and represents a 6.6 per cent year increase from fiscal 2020 compared to 2019.
Four of the five largest asset classes rose from the previous quarter, with Canadian pooled assets up two per cent, followed by foreign stocks (up 18.4 per cent) foreign pooled assets (up 6.2 per cent) and domestic real estate (up four per cent).
Domestic assets rose 2.3 per cent from the third quarter and were up 7.8 per cent year over year. In addition, two of the three largest categories of domestic assets were up, with pooled assets rising two per cent and real estate rising four per cent, while Canadian bonds were down 1.8 per cent. The values of the remaining asset categories went up, with the exception of mortgages which dropped 1.5 per cent. Short-term investments rose at the fastest pace (up 10.2 per cent) in the fourth quarter, followed by stocks (6.8 per cent) and miscellaneous (6.2 per cent).
And foreign assets rose 9.5 per cent to $781 billion in the fourth quarter on the strength of the two largest asset categories, pooled assets (up 6.2 per cent) and stocks (up 18.4 per cent). Short-term investments were up 21.4 per cent, while foreign bonds were down 16.2 per cent. Year over year, foreign assets rose 4.5 per cent to $33.5 billion.
The report also found the net income of Canadian trusteed pension funds rose from $31.1 billion in the third quarter to $50.2 billion in the fourth quarter. And total revenue rose 45.7 per cent, from $25.1 billion to $80.1 billion, driven mainly by higher profits on the sales of securities, which were up 64.3 per cent, and investment income (up 39 per cent).
In addition, total contributions were up 11.1 per cent, with employee contributions rising 13.9 per cent while employer contributions were up 9.5 per cent. Expenditures rose by a quarter to $29.9 billion, mainly due to an increase in cash withdrawals (up 182.1 per cent) and pension payments (up 9.2 per cent), which accounted for 83.3 per cent of expenditures in the fourth quarter. Total expenditures were up 8.7 per cent in 2020 compared to 2019.
The combined market value of assets held by both private and public sector trusteed pension funds rose 4.7 per cent in the fourth quarter. Public sector assets rose 5.9 per cent to $86.3 billion in the fourth quarter and 6.5 per cent year over year. In comparison, private sector assets rose 2.1 per cent in the fourth quarter and seven per ent year over year. Public sector assets accounted for 70 per cent of overall assets.