Employer pension plans (trusteed pension funds)

The value of the retirement savings of millions of Canadian workers with trusteed pension plans has increased for the seventh straight quarter.

Pension fund managers successfully enhanced the value of fund assets to $688.0 billion during the fourth quarter of 2004, a 3.7% increase over the previous quarter.

The value of funds has been rising since it hit a low of $532.4 billion in the first quarter of 2003.

Fund revenues amounted to $30.4 billion and expenditures $24.9 billion, for a net cash flow of $5.5 billion during the fourth quarter last year. This is about half of the $10.4 billion flow of the previous quarter.

Expenditures were abnormally high, partially because of a cash withdrawal to transfer money from an existing plan to a much smaller plan, both belonging to the same employer. As well, accounting practices within the industry typically result in larger than normal expenditures in the fourth quarter of each year.

Contributions were high in the fourth quarter at $9.0 billion, of which $6.7 billion were made by employers. Total contributions for the year, including those of both employers and employees, amounted to $30.3 billion. For the first time since 1994, annual contributions exceeded benefits paid out ($29.8 billion).

Employer contributions have been high since 2002, that is, over $10 billion a year. Prior to this time, employer contributions were typically $10 billion or less per year.

For the calendar year 2004, the industry had revenues of $93.4 billion and expenditures of $56.6 billion, for an annual cash flow of $36.8 billion. The cash flow for 2003 amounted to $22.8 billion.

Return on investment for the year was 8.6%, a significant improvement over 5.1% a year earlier.

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.