The Canada Pension Plan’s investment arm may be racking up impressive gains, but Canadians are mistaken if they think the portion they will be getting in retirement is growing at the same rate, says a new paper from the Fraser Institute.
“Unlike individual RRSP, TFSA, or pension accounts, there is no direct relationship between the rates of return earned in the CPPIB (Canada Pension Plan Investment Board) and the benefits received by eligible retirees,” authors Jason Clement and Joel Emes say in the paper to be released Thursday.
The CPP Fund generated the highest one-year return in its most recent fiscal year since it was created in 1999 — and racked up the largest chunk of annual investment income.
The investment portfolio of Canada’s biggest pension fund generated a net investment return of 18.3 per cent, according to results for fiscal 2015 released Thursday.
Assets climbed by $45.5 billion to $264.6 billion. The growth included $40.6 billion in net investment income after all costs of the Canada Pension Plan Investment Board. The balance came from CPP contributions.
Rebounding public equities markets contributed “significantly” to a 10.1% return for the CPP Fund in the most recent fiscal year ending March 31.
Notwithstanding the boost from public equities, which represented 32.2% of the CPP Fund portfolio, executives of the CPP Investment Board (CPPIB) said Thursday that they remain committed to private market assets and expect them to outperform over the long-term.
TORONTO — The Canadian Pension Plan Investment Board earned a 1.8% return on investment in the second quarter, as it saw gains in foreign markets and made several significant investments abroad.
CPPIB says it had net assets of $192.8-billion at Sept. 30, up from $188.9-billion at the end of the previous quarter.
The gain included $3.3-billion in net investment income and $600 -illion in net CPP contributions from Canadian employees and employers.
Caisse de depot et placement du Quebec returned 9.1 per cent in 2015 as international equities, boosted by a decline in the Canadian currency, offset negative returns at home.
Net investment income at Canada’s second-largest pension fund manager was $20.1 billion in 2015 versus $23.8 billion a year earlier, according to a statement issued Wednesday. Net assets rose to $248 billion as of Dec. 31 from $225.9 billion at the end of 2014, the Caisse said.
Canada’s largest pension funds have advice for Justin Trudeau’s government as it prepares to double its infrastructure investments over the next decade: follow the Australian model and think big.
The funds, which manage more than $760 billion in combined assets, say they need large projects like airports, toll roads and ports to justify their time and investment with so many global assets competing for their cash.
OTTAWA • Finance ministers from across the country will tackle some long-standing issues — from the global economy to pension reform and plans for a national securities regulator — when they meet Monday in the resort setting of Meech Lake.
Chances are, though, many of the issues will be left unresolved, such is the nature of these truncated talks.
The annual gathering — now held at the Quebec resort near Ottawa — is one of the few opportunities for federal finance minister Jim Flaherty to sit down for direct talks with his provincial and territorial counterparts.
TORONTO — Canadian pension funds achieved a return of 5.4 per cent on their investments in 2015 as their strategy of diversifying internationally helped mitigate volatile market conditions, research by RBC Investor & Treasury Services showed.
The research, which is the industry’s most comprehensive study of Canadian funds, showed they achieved a return of 3.1 per cent in the fourth quarter of 2015, following back-to-back losses in the second and third quarters.
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
There are limits on what the Fed can do when this bubble bursts, as it inevitably will, as surely as night follows day.
It's no secret that virtually every pension fund is dead man walking, doomed by central banks' imposition of low yields on safe investments, i.e. Zero Interest Rate Policy (ZIRP).