Employer pension plans (trusteed pension funds), second quarter 2020
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Released: 2020-11-18
The market value of assets held by Canadian trusteed pension funds rose 3.2% to $2.08 trillion in the second quarter (+3.7% year over year). These gains brought the assets back to their pre-COVID levels in the fourth quarter of 2019.
In terms of the market value of assets by type, the two largest domestic asset categories were both up, with pooled assets rising 4.7% and bonds 3.3%, contributing to an overall 2.6% increase in domestic assets. Similarly, the two largest foreign asset categories were also up, with pooled assets rising 9.5% and stocks 1.9%, contributing to an overall 4.3% increase in foreign assets.
Bottom line returns to black after first quarter losses
Following a $6.1 billion loss in the first quarter, Canadian trusteed pension funds bounced back with net income of $7.7 billion in the second quarter.
Total revenue fell $4.1 billion from the first quarter to $35.9 billion in the second quarter, mainly due to lower profits on sales of securities (-29.3%) and investment income (-9.6%).
Expenditures fell by over one-third (-$17.2 billion) to $28.2 billion, mainly driven by smaller losses on the sale of securities ($3.9 billion) compared with the previous quarter ($20.6 billion).
Domestic and private investments both up
The total value of domestic holdings rose 2.6% in the second quarter and 6.4% year over year. All categories of domestic assets rose, with the exception of short-term assets (-9.1%) and mortgages (-8.7%). The three asset categories posting the largest increases were pooled assets (+4.7%), bonds (+3.3%) and stocks (+2.4%).
Foreign assets were up 4.3% in the quarter—with the largest two categories, pooled assets (+9.5%) and stocks (+1.9%), both posting increases. Foreign bonds decreased 5.6% and foreign short term investments fell 8.6%. Foreign assets were down 1.2% year over year.
The private sector outperforms the public sector
The market value of assets held by private sector trusteed pension funds rose 6.5% in the second quarter and 4.8% year over year. Public sector funds rose 1.8% in the quarter and 3.3% year over year.
Overall, the market value of assets of public and private sectors combined rose 3.2% in the second quarter and 3.7% year over year.
The market value of assets held by public sector trusteed pension funds has historically comprised a steady two-thirds of the total market value.
Note to readers
For the purposes of this survey, trusteed pension funds include the assets of one or more registered pension plans: those held under a trust agreement, those held by a pension corporation or pension fund society, those administered under legislation by the Government of Canada or the government of a province of Canada, and those held by an insurance company for investment management only.
Excluded from the survey are pension funds held in total under an annuity insurance contract.
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