Employer pension plans (trusteed pension funds)

Trusteed pension funds reported in the second quarter their first positive cash flow in more than a year.

These funds, which are managed by legal trustees who invest the funds in financial and capital markets, had estimated revenues of $14.9 billion and expenditures of $11.3 billion in the second quarter.

The funds had a net income of nearly $3.7 billion, the first positive balance since the first quarter of 2002. It has also been this long since the funds made a profit rather than a loss from the sale of stocks.

The value of the funds' assets increased from $518.2 billion to $553.6 billion in the second quarter, a 6.8% gain. About 38% of fund assets were invested in stocks and were subject to stock market price variations.

Typically, the value of fund assets increase or decrease as stock prices rise or fall, and this was the case in the second quarter. The Standard & Poor's/Toronto Stock Exchange Composite Index (S&P/TSX) gained 10% in value over that period.

The increase in fund assets was also due to the increased value of their bond holdings, but to a lesser extent than the increase in the value of their stocks.

Bonds represented 37% of the funds' total value. Since the fourth quarter of 1999, trusteed pension fund managers have been slowly shifting their holdings from an emphasis on stocks to a more even split between stocks and bonds.

About 5.5 million Canadian workers are members of employer pension plans, and of these, about 4 million are members of trusteed plans.

The remaining 1.5 million workers' retirement benefits are covered by different funding arrangements of the federal and provincial governments (primarily for their public servants), and by insurance company contracts or Government of Canada annuities, usually purchased by private sector employers for employees approaching retirement.

Available on CANSIM: tables 280-0002 to 280-0004.

Definitions, data sources and methods: survey number 2607.

For more information, 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.