The market value of employer-sponsored pension funds declined 1.3% compared with the fourth quarter to $1.6 trillion in the first quarter of 2016, Statistics Canada announced on Thursday.
This followed a 3.0% gain in the previous quarter, StatsCan says.
The weakness came as the value of pension fund equity holdings fell 3.1% in the quarter, and the value of bond holdings decreased 2.2%. Conversely, the value of investments in real estate rose 3.4% in the quarter.
At the same time, pension funds also saw the value of their foreign investments, which represents about one-third of pension assets, decline by 6.0% in the first quarter, StatsCan notes.
As well, pension fund revenue fell by 35.8% to $33.5 billion in the quarter. Contributions (from both employees and employers) decreased by 10.2% in the quarter, investment income was down 23.1%, and profits from the sale of securities dropped 68.9%.
Conversely, fund expenditures were up 22.2% in the quarter, “mainly because of increased losses from the sale of securities,” StatsCan says.
The combination of lower revenues and higher expenditures slashed net income from $29.7 billion in the fourth quarter to $6.1 billion in the first quarter.
More than 6.2 million Canadian workers are members of employer-sponsored pension plans, StatsCan sasy. Of this group, 5.2 million (83.3%) workers belong to pension plans with assets managed by trusteed funds. The remaining members have assets managed by insurance company contracts.