CANADA - The Canada Pension Plan reserve fund grew to a total CAN$81.3bn in fiscal 2005 but the investment gain of CAN$6.3bn on assets came in short of the CAN$10.3bn reaped in 2004.
Announcing its results for the year ending March 31, 2005, the CPP said the rate of return was 8.5% compared to 17.6% the previous year, on the back of poorer performance from global equity markets. The fund’s portfolio grew CAN$10.8bn, up from CAN$70.5bn the previous year.
“Global equity markets continued to perform well in fiscal 2005, but not at the high levels of the previous year,” the fund said in a statement. “Consequently, equities and real return assets produced income of CAN$4.7bn for an 11.6% rate of return compared with CAN$7.2bn and a 31.7% rate of return in fiscal 2004.”
The return on fixed income was 4.6%, down from 8.7% in fiscal 2004 – representing an income of CAN$1.6bn and CAN$3.1bn respectively.
The fund earned a real inflation-adjusted return of 4.8% over the past five years, above the required benchmark return of 4.1%.
Commenting on the results, David Denison, president and CEO of CPP Investment Board, said: “We are now part way through our diversification programme for the reserve fund and the results of the past year reflect its current composition. Going forward, we will be taking steps to more broadly diversify the portfolio beyond the current asset mix by increasing our holdings in real estate, infrastructure and other real return assets.”
At March 31, 56.2% of the fund was invested in publicly traded stocks, 39% in fixed income securities, 3.6% in private equity and 1.2% in real estate and infrastructure.
Based on actuarial projections, CPP contributions are expected to exceed benefits until 2022. The three-year transfer of bonds from the federal department of finance will be complete on April 1, 2007 and the one-year transfer of the cash operating reserve will finish in August this year.
The registration deadline for the Workplace Savings & Benefits Awards 2019 is today.
This week's top stories were the DWP giving the green light to CDC and TPR granting extensions for 11 master trust authorisation applications.
Susan Martin says building strong foundations for business are the only way forward as the pensions industry is radically shaken up
The Pensions Regulator (TPR) has granted Now Pensions a six-week extension for its master trust authorisation application after the 31 March deadline, PP can reveal.