While total pension wealth rose for an eighth consecutive year in 2016, the wealth of employer-based pension plans increased at a much weaker pace than the previous year, according to Statistics Canada.
Total pension wealth rose 3.8 per cent to $3.6 billion by the end of 2016, following a 5.1 per cent gain in 2015. The wealth of employer-based pension plans rose 3.5 per cent to $2.1 billion by the end of 2016, a much weaker pace than the 6.4 per cent increase recorded a year earlier.
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A contributor to the weaker pace was the exchange rate appreciation by the end of 2016, which resulted in the devaluation of foreign investments, according to Statistics Canada.
The Canada Pension Plan and Quebec Pension Plan both increased, up 5.7 per cent and 8.6 per cent, respectively, which Statistics Canada attributes to strong equity market performance. And individual registered saving plan wealth rose 3.5 per cent at the end of 2016, after experiencing a dip of 0.2 per cent at the end of 2015.
Private pension assets — the combined assets in employer-based pensions and individual registered savings plans — accounted for 89.9 per cent of total pension wealth at the end of 2016. This number dropped from the 90.2 of total pension wealth in 2015.
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Excluding old age security, total pension withdrawals ($194 billion) exceeded contributions ($188 billion) for the second consecutive year, according to Statistics Canada. In 2016, withdrawals from pension plans rose 3.8 per cent, while contributions rose 2.3 per cent. However, withdrawals from all tiers were lower than the 7.1 per cent seen in 2015.
Pension plans’ investment income was up 4.8 per cent in 2016, a 0.4 per cent drop from the 5.2 per cent rise in 2015. Income grew for employer-based pension plans ( up 5.9 per cent), social security plans (up 4.6 per cent) and individual registered savings plans (up 1.1 per cent) in 2016.
Overall, revaluations and other changes added some $21 billion to pension wealth in 2016, down from the $61 billion added in 2015.