Pension wealth advanced to $2.85 trillion at the end of 2013, up 11.4% from 2012, says Statistics Canada.
This followed an equally robust increase of 9.3% in pension wealth in 2012. The strength was broad based, with all components (social security, employer-based pension plans and individual registered savings plans) posting gains from 2012 to 2013.
The proportion of pension assets to household credit market debt has been on the rise since 2011.
Pension assets were 1.63 times credit market debt held by households in 2013, up from 1.53 in 2012 and 1.47 in 2011. Despite the recent growth, the proportion was still below the level of 1.79 reached in 2006 before the financial crisis and below the all-time high of 2.0 recorded in 1999.
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Wealth in employer-based pension plans rose 11% from 2012 to $1.57 trillion at the close of 2013. This followed a 9.2% increase in 2012. At the end of 2013, wealth in trusteed pension plans increased by 12.7%, making these plans the main contributor to the growth in the wealth of employer-based pension plans.
Assets in individual registered savings plans grew to $1.03 trillion at the end of 2013, an increase of 10.7% over 2012. This growth was slightly stronger than the 8.4% recorded at the end of 2012.
Assets held in employer-based pension plans and individual registered savings plans combined accounted for 91.3% of total pension wealth at the end of 2013, almost unchanged from 91.7% in 2012.
Wealth in social security plans stood at $249 billion at the close of 2013, up 16.6% over the preceding year, following an increase of 14% in 2012.
Overall, the robust growth in pension wealth in 2013 was mainly driven by the strong performance in equity markets, particularly on the international front. Pension wealth accounted for 55.2% of total financial assets held by Canadian households at the end of 2013, up slightly from 54.6% in 2012.
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Pension plan contributions rose 5.4% in 2012, following an increase of 4.9% in 2011. Contributions to employer-based plans grew 5.1% in 2012, while those to individual registered savings plans rose 3.9% and those to social security plans were up 6.8%.
In 2012, growth in the total investment income of pension plans slowed to 4.7%, following a 10.1% increase in 2011. Investment income rose in two of the three pension tiers in 2012: social security plans (+24.2%) and employer-based pension plans (+4.6%), while it was relatively unchanged for individual registered savings plans (-0.8%).
With the exception of individual registered savings plans, withdrawals were higher in 2012 compared with 2011. Withdrawals from pension plans increased 6.9% in 2012, after rising 4.3% in 2011. For employer-based pension plans, withdrawals were up 8.5% in 2012, following a 2.8% gain in the previous year. Withdrawals increased 6.7% for social security plans and 4.5% for individual registered plans in 2012.
Pension plan contributions and investment income combined grew at a slower rate in 2012 (+5.2%) compared with 2011 (+6.6%), while withdrawals were higher in 2012. At the same time, revaluations added $120 billion to pension wealth in 2012, after reducing its value by $14 billion in 2011.
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