The market value of Canadian employer-sponsored pension funds totalled $1.2 trillion at the end of the third quarter of 2012, up 2.6 per cent from the previous quarter, according to Statistics Canada. The increase followed a 1.3 per cent decline in the second quarter.
Pension fund investments in stocks grew 3.3 per cent in the third quarter, surpassing the 1.5 per cent gain in the value of shares on the Toronto Stock Exchange for the same period.
The value of bond holdings increased 1.7 per cent in the third quarter, while investments in real estate assets grew 3.9 per cent.
Foreign investments increased in value by 2.7 per cent. Canadian assets rose 2.5 per cent, largely as a result of increases in the value of Canadian stocks and bonds.
Revenues in the third quarter grew 10.1 per cent, the result of increased profits on the sale of securities. Net income grew from $7.4 billion in the second quarter to $16.4 billion at the end of the third quarter, as reduced losses on the sale of securities lowered expenditures by 29.7 per cent.
Pension fund contributions fell eight per cent to $11.9 billion in the third quarter following similar drops of 7.6 per cent in the second quarter and 7.7 per cent in the first quarter of the year. Pension fund contributions typically peak in the fourth quarter of each year when pension plan sponsors make special payments to cover unfunded pension liabilities. Benefits paid to retirees decreased 5.7 per cent to $11.2 billion.Just over six million Canadian workers are members of employer pension plans, according to Statistics Canada. Of this group, five million workers are members of trusteed plans. The remaining one million members with employer pension plans are managed principally by insurance company contracts. Data in this release refer only to trusteed plans and their pension funds.