New data from Statistic Canada report that the market value of Canadian employer-sponsored pension funds totalled $1.2 billion at the end of the third quarter of 2012, which is up 2.6% from the previous quarter. This increase followed a 1.3% decline in the second quarter.
Pension fund investments in stocks grew 3.3% in the third quarter, surpassing the 1.5% gain in the value of shares on the Toronto Stock Exchange for the same period.
The value of bond holdings increased 1.7% in the third quarter, while investments in real estate assets grew 3.9%.
Foreign investments increased in value by 2.7%. Canadian assets rose 2.5%, largely as a result of increases in the value of Canadian stocks and bonds.
Revenues in the third quarter grew 10.1%, the result of increased profits on the sale of securities. Net income grew from $7.4 billion in the second quarter to $16.4 billion at the end of the third quarter, as reduced losses on the sale of securities lowered expenditures by 29.7%.
Pension fund contributions fell 8.0% to $11.9 billion in the third quarter following similar drops of 7.6% in the second quarter and 7.7% in the first quarter of the year. Pension fund contributions typically peak in the fourth quarter of each year when pension plan sponsors make special payments to cover unfunded pension liabilities. Benefits paid to retirees decreased 5.7% to $11.2 billion.
Just over six million Canadian workers are members of employer pension plans. Of this group, five million workers are members of trusteed plans. The remaining one million members with employer pension plans are managed principally by insurance company contracts. Data in this release refer only to trusteed plans and their pension funds.