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Pension plans stumble in Q3

Published by Steve Coleman on March 13, 2012

Canada's trusteed pension plans took a hit to the bottom line during the third quarter of 2011.

A Statistics Canada look at employer-sponsored pension funds said their overall value fell 1.7 per cent from the second quarter to $1.06 trillion.

Pension fund investments in stocks fell 9.3 per cent in the third quarter last year, matching the decline in the Toronto Stock Exchange. A 5.6 increase in the value of federal and provincial bonds helped recoup some of the money lost.

Stats Can says trusteed pension funds lost 6.1 per cent of their value in foreign stocks and bonds during the same period, while Canadian assets increased 0.2 percentage points with government bonds.

But it was revenue that took the largest hit during the quarter as revenues fell 28.4 per cent from smaller profits on the sale of securities and declines in investment income and contributions. Losses on securities sales pushed expenditures up 17.6 per cent and income fell from $12.9 billion to $1.3 billion.

Companies looking after pension funds also saw fewer contributions during the period. Both employers and employees contributed 13.8 per cent less, making the total for the three-month period $10.7 billion. At the same time, retiree benefits rose to $11 billion.

Stats Can says about six million Canadians belong to employer pension plans. About five million of those belong to trusteed plans, while the rest have their money watched and invested by insurance company contracts.

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