Employer pension plans (trusteed pension funds)

Trusteed pension fund managers struggled to increase the value of the retirement savings of 4.5 million Canadian workers over the third quarter of 2004.

Assets increased to $663.7 billion, up a slight 1.1% from the second quarter. However, this was the sixth quarter in a row to show a positive increase in value since the funds bottomed out in the first quarter of 2003 at $532.4 billion.

The growth of the funds in the third quarter nearly matched the gains made in the value of Canadian stocks. The Toronto Stock Exchange gained 1.4% over the same period.

The funds had revenues of $19.3 billion and expenditures of $8.9 billion for a positive cash flow of $10.4 billion, much less than the $16.8 billion cash flow of the second quarter of 2003.

Employer contributions remained relatively high at $4.9 billion, but down nonetheless from $5.6 billion contributed last quarter.

Of greater significance is that pension fund managers stemmed the significant losses on the sale of securities they experienced in the first quarter of the year. In the third quarter, these losses were cut to half a billion dollars, down substantially from $5.4 billion in the first quarter.

Overall, the industry had net profits (profits minus losses) of $6.5 billion from the sale of securities.

Pension benefits paid to retirees amounted to $6.7 billion over the quarter. Benefit payments have been increasing slowly and irregularly over the last few years. They should increase at a more rapid rate over the next few years when members of the baby boom generation start to retire in large numbers.

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.

Data for all quarters back to March, 2003 have been revised to accommodate late returns and minor reporting errors.

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 inquire about the concepts, methods, or data quality of this release, contact Client Services (613 951-7355; 1-888-297-7355; fax: 613 951-3012; income@statcan.gc.ca), Income Statistics Division.