The CPP Fund, which includes investment earnings and the portion of CPP contributions not needed to pay current pensions, grew by $7.5 billion to $110.8 billion during the quarter ended Dec. 31, 2006.

For the quarter, the CPP fund generated an investment rate of return of 8.7%, or an increase of $8.9 billion, while the fund paid out $1.4 billion for CPP benefits. The result is a $7.5 billion overall increase in the CPP fund since Sept. 30, 2006.

During the nine months ending Dec. 31, 2006, the CPP fund experienced a year-to-date investment rate of return of 10.1%, or $10.3 billion, while the fund added $2.5 billion from CPP contributions not needed to pay current pension benefits.

“The strong performance of Canadian and foreign equity markets was the largest factor behind the positive investment returns this quarter for the CPP fund,” said David Denison, president and CEO, CPP Investment Board, in a news release. “We are pleased that further diversification of the CPP fund into a broader range of asset classes and geographies has also contributed to these strong returns.”

At Dec. 31, 2006, the CPP fund consisted of equities — 66.8% ($74.1 billion), of which public equities made up 60.4% ($67.0 billion) and private equities 6.4% ($7.1 billion); bonds — 22.6% ($25.1 billion); inflation-sensitive assets — 9.9% ($10.9 billion); and cash and cash equivalents — 0.7% ($0.7 billion).

CPP contributions are expected to exceed annual benefits paid until 2022, providing a 15-year period before a portion of the investment income is needed to help pay CPP benefits. Over the next 10 years the Chief Actuary of Canada estimates that the CPP fund will grow to approximately $250 billion, making it one of the largest single purpose pools of investment capital in the world and helping to secure the CPP for the long term.