The Daily, Tuesday, June 26, 2001. Employer pension plans (trusteed pension funds)

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Employer pension plans (trusteed pension funds)

The market value of the assets of employer-sponsored pension plans declined to $595 billion at the end of the fourth quarter of 2000, down 2.4% from the third quarter. This decline was a direct result of weakened stock prices. The TSE 300 Composite Index lost nearly 14% of its value over the fourth quarter, while the Standard & Poor's 500 lost 8%.

The value of foreign holdings was more than $117 billion, or about 20% of the total market value of the funds' assets. When measured at their purchase price (book value), foreign holdings amounted to just under 19%. Fund managers accelerated their purchase of foreign holdings during 2000, reversing the slow decline in proportion throughout 1999.

Over all of 2000, fund assets grew 5.4%. When adjusted for inflation, the increase was 2.2%. This is the weakest performance over a calendar year since 1994. Fund assets had been increasing at significant double-digit rates throughout most of the decade, but market conditions by the end of 2000 greatly reduced the value of the funds' equity holdings.

Net income, however, was exceptionally high at $18.4 billion, up 28% from the third quarter.

Total net income for the year 2000 was $62.5 billion, nearly double the $33.6 billion earned in 1999. This increase was almost entirely the result of profits made from the sale of stocks. Even though stock prices declined rapidly during the fourth quarter of 2000, fund managers sold stocks for prices well in excess of their original purchase price.

Quarterly estimates of trusteed pension funds provides data on the revenues, expenditures and assets of employer-sponsored pension plans as of December 31, 2000. It also contains a time series and analysis relating changes in the data to financial indicators.

The fourth quarter 2000 issue of Quarterly estimates of trusteed pension funds , Vol. 28, no. 4 (74-001-XIB, $14/$47; 74-001-XPB, $19/$62) is now available.

For more information about the current survey results and related products and services, or to enquire about the concepts, methods, or data quality of this release, contact Client Services (1-888-297-7355; 613-951-7355; fax: 613-951-3012; income@statcan.gc.ca), Income Statistics Division.