Employer pension plans (trusteed pension funds), third quarter 2022
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Released: 2023-03-15
In the third quarter of 2022, the market value of assets held by Canadian trusteed pension funds rose by $46.8 billion, or 2.3%, and continued to hover around $2.1 trillion. Year over year, the market value fell by 1.8%, or $38.6 billion.
The five largest asset categories, which together accounted for just over 90% of the total market value of assets, all rose in the third quarter. The largest dollar increase was seen in the other assets category (+$14.8 billion; +11.3%), followed by infrastructure (+$11.6 billion; +6.5%) and real estate (+$7.3 billion; +2.8%). Equities rose by $7.2 billion, or 0.9%, and bonds increased by $3.2 billion, or 0.6%.
Canadian bonds and equities decreased both quarter over quarter and year over year. In the third quarter, Canadian bonds fell 1.9% and Canadian equities fell 0.1%; while, year over year, Canadian bonds fell 11.4% and Canadian equities fell 7.9%.
Overall, domestic assets fell both in the third quarter (-0.4%) and year over year (-5.8%). Foreign assets rose by 3.4% in the third quarter and by 0.9% year over year.
Net income falls in the third quarter
Canadian trusteed pension funds posted a net loss of $5.4 billion in the third quarter, following a net loss of $3.4 billion in the previous quarter. By comparison, the third quarter of 2021 had a net income of $26.7 billion.
In the third quarter of 2022, total revenue fell 20.5% (-$5.1 billion) to $19.9 billion, mainly because of net realized losses on fixed income investments and financial derivatives, which totalled $7.5 billion. Those net realized losses were partially offset by net realized gains on equities and tangible assets, which amounted to $5.6 billion.
Year over year, total revenue was down 61.9% from $52.2 billion.
In the third quarter, expenditures fell 10.9% (-$3.1 billion) to $25.3 billion, and, year over year, they fell 0.8% (-$0.2 billion) from $25.5 billion.
Foreign assets grow, while domestic assets fall
The total market value of domestic holdings fell $3.8 billion (-0.4%) to $881.2 billion in the third quarter. Year over year, the value decreased $53.8 billion (-5.8%) from $935.0 billion.
In the third quarter, three of five domestic asset classes declined, and the total decrease amounted to $8.8 billion. Bonds declined by 1.9% (-$8.5 billion), equities declined by 0.1% (-$0.1 billion) and short-term investments declined by 0.2% (-$0.2 billion). Infrastructure and real estate, the two remaining asset classes, partially offset these declines by posting a combined $5.0 billion increase.
All foreign asset categories but one collectively grew by $32.8 billion. Bonds added $11.7 billion to the total market value, while infrastructure added $7.9 billion (+5.7%) and equities added $7.3 billion (+1.2%). Foreign short-term assets was the only category that posted a decline, falling 1.1%, or $0.1 billion.
Year over year, foreign assets fell 0.9% (-$8.8 billion), still unable to breach the $1 trillion mark achieved in the first quarter of 2022.
The value of assets of nationality unknown accounted for 12.1% of all assets at the end of the third quarter, compared with 11.5% in the second quarter and 10.8% one year earlier.
Public sector assets grow, while private sector funds decline
The value of assets held by public sector plans rose by $44.4 billion (+2.7%) and amounted to $1.7 trillion at the end of the third quarter, while private sector assets increased by $2.4 billion (+0.6%) to reach $420.9 billion. Year over year, public sector funds rose by $13.8 billion (+0.8%), while private sector plans were down $52.4 billion (-11.1%).
The upward trend in the proportion of total assets of trusteed pension funds represented by the public sector continued in the third quarter. The proportion reached 80.2%, up from 79.9% in the second quarter and from 78.1% in the first quarter.
Note to readers
Starting in the first quarter of 2021, the survey was redesigned to collect additional variables and increase the number of pension funds covered quarterly.
Previously, the quarterly survey included approximately the 150 largest trusteed pension funds, and the remainder of the pension amounts was imputed based on the results of the biennial Census of Trusteed Pension Funds. The new design no longer utilizes the data from the biennial Census, which has been discontinued in 2016. Instead, the quarterly survey's sample has been augmented to include the top 250 trusteed pension plans, equating to approximately 90% of the total value of all trusteed pension assets, resulting in reduced respondent burden. Therefore, the values reported in this release refer to the 250 largest pension plans and no longer include imputation for the remainder of the trusteed pension plan universe.
The new design eases data collection for respondents and data interpretability for users by reflecting the format of financial statements more closely. It also allows for higher accuracy in certain variables, such as the share of assets invested abroad. Additional detail in the reporting categories also reduces the share of assets classified in the "other assets" category.
Tables 11-10-0084-01, 11-10-0085-01 and 11-10-0086-01 have replaced tables 11-10-0076-01, 11-10-0077-01 and 11-10-0079-01, which are now terminated and have been archived.
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.
Data on revenues and expenditures for pension funds routinely exhibit seasonal characteristics. Readers should, therefore, view quarterly changes with some caution.
Pension funds held in total under an annuity insurance contract are excluded from the survey.
The data are subject to revisions for a period of 18 months from initial release.
Products
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Contact information
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