Canadian trusteed pensions reach $2.2 trillion market value

Statistics Canada data also shows the plans saw positive net income in Q4 2023

Canadian trusteed pensions reach $2.2 trillion market value
Steve Randall

Canadian employer pension plans held in trusts showed positive momentum in the fourth quarter of 2023, according to new data from Statistics Canada.

The market value of trusteed pension plans increased by almost $96 billion, or 4.5%, to reach $2.2 trillion, driven by bonds which accounted for more than 92% of market value and gained $53 billion (10%) in the quarter. Equities were up by $26 billion (3%).

The ‘other’ and infrastructure categories added around $20 billion and $18 billion respectively, while real estate was the only one of the four main asset categories to post a decline (of $8 billion).

Domestic assets were up 3% or $27 billion to $904.2 billion, with only bonds and infrastructure posting gains. Foreign assets were up 4.5% or $47 billion to just under $1.1 trillion with equities, infrastructure, and bonds providing positive growth.

The plans posted net income of $28 billion in the fourth quarter, an impressive 66% increase compared to the $17 billion of one year earlier. Total revenue increase by around one third ($14 billion) to $55 billion.

In the fourth quarter, the value of assets held by public sector plans rose by $65 billion (4%) from the previous year, nearly reaching $1.8 trillion, while private sector assets increased by $31 billion (7%) to $457 billion.

The proportion of total assets of trusteed pension funds held by the public sector fell from 80.2% at the end of 2022 to 79.7% at the end of 2023.

Some figures in this article have been rounded.

Better retirement planning

With an aging population, the importance of strong retirement planning has never been more critical.

But many Canadians are still leaving their retirement finances to chance with 42% of respondents to an IG Wealth Management study revealing that were saving up for their retirement without an actual retirement plan.

“Advisors should not assume that the clients who have invested with them necessarily know how much they will need. Just because someone comes across as confident making investment decisions doesn’t mean they have confidence in terms of their own personal goals,” Christine Van Cauwenberghe, the firm’s head of financial planning told Wealth Professional in February. “It’s important to sit down with clients and outline what the financial plan actually is, to talk about their personal goals and customize them with clients to give them more financial confidence.”