CANADA - Canadian pensions marked their lowest quarterly returns since the start of the financial crisis on the back of world-wide market uncertainty, said RBC Dexia.
Canadian pension assets fell 5.5% in the three months ending 30 September 2011, bringing year-to-date performance within the C$340bn ($337.9bn) RBC Dexia universe down to -3.2%.
RBC Dexia director of advisory services, Don McDougall said: "Ongoing uncertainty over Europe's sovereign debt crisis, a US downgrade and mounting fears of slower global economic growth drove pensions to their lowest quarterly result since the 2008 financial crisis."
The MSCI World index dropped by almost 10% with the decline led mainly by weakness in European banks.
"Exchange rates were a key this quarter as a weaker Canadian dollar against most major currencies - particularly the US dollar, helped reduce the loss to Canadian investors," said McDougall.
Canadian equity was the worst performing asset class for Canadian plans as the S&P TSX Composite lost 12% in the quarter and 11.9% year-to-date.
Bonds performed well as investors sought refuge, with an increase of 2.5% year-to-date.
"Fixed income strength continued to come from declining long-term bond yields as the DEX Long Term bond index had its best three-month showing in 20 years, advancing by 9.8% over the quarter," he said.
Enhanced powers for The Pensions Regulator (TPR) to prosecute and fine company directors who "wilfully or recklessly" put their defined benefit (DB) pension scheme at risk will be hard to enforce, commentators say.
Melrose has pledged to contribute up to £1bn to GKN's pension schemes as part of a final offer to acquire the engineering business.
Existing master trusts will be forced to pay £41,000 when applying for authorisation under the upcoming regime, the government has confirmed.
UPDATE 2 - DWP publishes DB white paper: Stronger powers for TPR, DB chair statements to be introduced
The Pensions Regulator (TPR) will be given the power to fine company bosses who deliberately puts their defined benefit (DB) schemes at risk, the government has confirmed.