Employer pension plans (trusteed pension funds)

Trusteed pension funds continued their long climb back from the financial low point set in March 2003.

Over the 15 months to June 2004, fund assets increased nearly 24%, from $531.2 billion to $656.1 billion, a new record high. Before the downturn, fund assets had peaked at $614.4 billion in September 2000.

There was only a 0.5% gain in the second quarter of this year, however. This small gain was primarily due to a 2.2% increase in the value of the funds' foreign holdings. Foreign holdings represented 24.4% of all fund assets.

Canadian stock market prices actually fell 0.5% over the quarter. Stock prices have risen since then, suggesting that pension fund assets may continue to grow for at least the remainder of 2004.

Pension funds had revenues of $25.8 billion and expenditures of $8.8 billion, for a net cash flow of $17.0 billion. This was much greater than the $4.0 billion cash flow in the first quarter this year. Cash flow can vary considerably quarter to quarter. This is partly because of accounting practices within the industry, but primarily because of profits or losses from the buying and selling of stocks.

Employer contributions remained high at $5.6 billion. Contributions have been on the rise since early 2002 when employer contributions were typically half that amount. Many employers had been taking a contribution holiday up to that time, but declining asset values meant that employers had to start contributing again.

About 5.5 million Canadian workers belong to employer pension plans. Of these, about 4.5 million are members of trusteed plans. (Data in this release refer only to the trusteed plans, and all values are in current dollars).

The remaining one million workers with employer pension plans are covered by the consolidated revenue funds of the federal and provincial governments, or by insurance company contracts or Government of Canada annuities.

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

Definitions, data sources and methods: survey number 2607.

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 (613 951-7355 or 1 888 297-7355; fax: 613 951-3012; income@statcan.gc.ca), Income Statistics Division.