The market value of retirement savings held in employer-sponsored pension funds declined for the third consecutive quarter during the first three months of 2009, Statistics Canada reported on Tuesday.

During the first quarter, the market value of savings in trusteed pension funds fell by $19.8 billion, or 2.4%. Approximately 4.8 million Canadian workers are members of trusteed funds.

The decline was more modest than those in the two previous quarters. The value of savings fell by 8.7% in the third quarter and 6.7% in the fourth quarter of 2008.

Employer sponsored pension funds amounted to $791.1 billion at the end of the first quarter of 2009, down $163.5 billion from a high of $954.6 billion at the end of 2007.

The market value of stocks and equity funds accounted for 31.1% of total pension fund assets at the end of the first quarter of 2009, down from a high of 40.1% in the first quarter of 2006, and down from 35.6% in the first quarter of 2008.

The proportion of fund assets held in bonds increased to 38.4%, up from 34.6% a year earlier. Real estate investments accounted for 8.7% of total assets, mortgages accounted for 1.8% and short-term investments comprised 4%. The remaining assets, which include pooled foreign funds, accounted for 16%.

Expenditures of $31.4 billion exceeded revenues of $17.6 billion in the first quarter for a negative cash flow of $13.8 billion. This was the third consecutive quarter that pension funds experienced a negative cash flow. It resulted from continuing losses on the sale of securities, and reduced investment income and pension contributions, which both typically peak in the fourth quarter of each year.

Revenue from employer and employee contributions in the first quarter of 2009 amounted to $8.9 billion. Benefits paid to retirees reached $10 billion, exceeding pension contributions for a seventh quarter in a row.

IE