Contributions to trusteed pension plans in 2004 were greater than benefits paid, Statistics Canada said today.

It is the first time since 1994, that contributions have outstripped benefits.

Total contributions for the year, including those of both employers and employees, amounted to $30.3 billion. Benefits paid out were $29.8 billion.

The government agency also reported that the value of the retirement savings in trusteed pension plans increased for the seventh straight quarter in the fourth quarter of 2004.

Pension funds saw fund assets to $688.0 billion during the quarter, a 3.7% increase over the previous quarter. The value of funds has been rising since it hit a low of $532.4 billion in the first quarter of 2003, Statscan said.

Fund revenues were $30.4 billion and expenditures $24.9 billion, for a net cash flow of $5.5 billion during the fourth quarter last year. This is about half of the $10.4 billion flow of the previous quarter.

“Expenditures were abnormally high, partially because of a cash withdrawal to transfer money from an existing plan to a much smaller plan, both belonging to the same employer. As well, accounting practices within the industry typically result in larger than normal expenditures in the fourth quarter of each year,” StatsCan noted.

Contributions were high in the fourth quarter at $9.0 billion, of which $6.7 billion were made by employers.

For the calendar year 2004, the industry had revenues of $93.4 billion and expenditures of $56.6 billion, for an annual cash flow of $36.8 billion. The cash flow for 2003 amounted to $22.8 billion.

Return on investment for the year was 8.6%, a significant improvement over 5.1% a year earlier.

About 5.5 million Canadian workers belong to employer pension plans. Of these, about 4.5 million are members of trusteed plans. The remaining one million workers with employer pension plans are covered by the consolidated revenue funds of the federal and provincial governments, or by insurance company contracts or Government of Canada annuities.