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Employer pension plans (trusteed pension funds)

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The Daily

Thursday, June 14, 2007
Fourth quarter 2006

The market value of trusteed pension funds assets ended 2006 with a surge to $915 billion.

Fund assets, which had declined 2.1% earlier in 2006, rebounded 7.0% in the final three months. Year-end fund values have increased steadily since bottoming out at $532 billion in the first quarter of 2003.

At the end of 2006, stocks and equity funds accounted for 41.0% of pension fund assets, while bonds and bond funds represented 32.3%, real estate 6.1%, short-term investments 2.9%, mortgages 1.4% and other assets 15.8%.

Domestic holdings accounted for 69.5% of total fund assets. The share of investments in foreign holdings increased to 30.5% from 25.6% a year ago.

Revenues of trusteed pension funds peaked in the fourth quarter at $32.6 billion, largely the result of increased investment income and returns from buying and selling stocks. Although expenditures also increased (+6.6%), net income doubled from the previous quarter to $22.1 billion.

On a year-over-year basis, revenues for 2006 hit $109.4 billion, up 15.6% from 2005. Expenditures rose 9.5% as a result of steadily increasing benefit payments to retirees. Net income of $69.3 billion was up 19.5% from the previous year.

Contributions rose 10.9% in the fourth quarter to $8.5 billion, of which $5.6 billion were employer contributions. Employer contributions have increased significantly in the last five years, in part due to large special payments to cover unfunded liabilities. Contributions have more than doubled from $10.4 billion in 2001 to over $25.4 billion in 2006.

For 2006, annual contributions, including those of employers and employees, amounted to $35.9 billion, up 16.3% from the $30.8 billion contributed in 2005. Annual contributions have exceeded benefits paid to retirees since 2003.

Of the 5.7 million Canadian workers belonging to employer pension plans, about 4.6 million were members of trusteed plans in 2006. 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 (toll-free 1-888-297-7355; 613-951-7355; fax: 613-951-3012;, Income Statistics Division.