The market value of employer-sponsored pension funds totalled $1.1 trillion at the end of the first quarter of 2012, up 4.1 per cent from the previous quarter and the largest gain since the fourth quarter of 2010, according to Statistics Canada.
Pension fund investments in stocks rose nine per cent to $369.1 billion. The gain reflects a 14.7 per cent increase in the value of foreign stocks and a 3.2 per cent gain in Canadian stocks.
Foreign investments accounted for 31.9 per cent of total pension fund assets in the first quarter, up from 29.8 per cent in the previous quarter.
Investments in bonds edged down 0.3 per cent to $423.6 billion. The share of pension fund assets in bonds fell from 38.8 per cent in the fourth quarter of 2011 to 37.2 per cent in the first quarter of 2012, while the share in stocks increased from 30.9 per cent to 32.4 per cent, found Statistics Canada.
Pension fund revenues increased 26.7 per cent to $37 billion in the first quarter, the result of significant gains from the sale of securities. Expenditures fell 18.1 per cent to $14.4 billion, mainly as a result of lower losses from the sale of securities, said Statistics Canada.
As a result, net income nearly doubled from $11.6 billion to $22.6 billion in the first quarter, the highest net income since the fourth quarter of 2010.
Just over six million Canadian workers are members of employer pension plans. Of this group, five million workers are members of trusteed plans. The remaining one million members with employer pensions are in plans managed principally by insurance company contracts. This data refers only to trusteed plans and their pension funds.
© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.