skip content
Loading indicator

Enter search term

August 6, 2004

The CPP Investment Board announced today that the reserve fund grew to $73.2 billion from $70.5 billion in the three months ending June 30, 2004, despite a negative 0.3 per cent rate of return for the period. Changes in the reserve fund at any given quarter are the result of investment earnings and contributions to the CPP, net of benefits paid.

The $2.7 billion overall growth of the reserve fund was the result of $2.9 billion in contributions net of benefits less the investment loss of $227 million.

The equities and real estate portion of the overall portfolio gained 0.8 per cent during the quarter producing an investment gain of $267 million. This gain was offset by a decline in the fixed-income portfolio, due to rising interest rates, of 1.3 per cent or $494 million for a net investment loss of 0.3 per cent, or $227 million.

“These flat results are no surprise after four consecutive quarters of strong investment performance in both equities and fixed income,: said John MacNaughton

 President and CEO of the CPP Investment Board. “What is noteworthy is that fixed income returns are not always positive. Just like equities, bond prices also experience short-term swings. This is one of the reasons we have been steadily diversifying the portfolio over the last five years away from an exclusive reliance on bonds, as part of our long-term strategy to help sustain the CPP.”

At June 30, 2004, the assets of the Canada Pension Plan consisted of $37.4 billion in bonds and money market securities, and $35.8 billion in publicly traded stocks, private equities, real estate and infrastructure. 

The bonds and cash held in Ottawa are gradually being transferred to the CPP Investment Board. The transfer of bonds began on May 1, 2004, and will take three years to complete. The transfer of cash will begin in September 2004, and take a year to complete. 

Based on actuarial projections, CPP contributions are expected to exceed benefits until 2021, providing a 17-year period before a portion of the investment income is needed to help pay CPP benefits.

The CPP Investment Board is a Crown corporation created by an Act of Parliament in December 1997. It invests in capital markets the funds not needed by the Canada Pension Plan to pay current pensions. Cash flows are currently invested in equities and real estate to balance the cash and bonds owned by the Canada Pension Plan. By increasing the long-term value of funds, the CPP Investment Board will help the Canada Pension Plan to keep its pension promise to Canadians. Based in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. Its fiscal year is from April 1 to March 31. For more information about the CPP Investment Board, visit www.cppib.ca.

A teleconference has been scheduled for Friday August 6, 2004, at 11 a.m. ET to discuss these results. Journalists who wish to participate should contact Jennifer Ross at 416-868-4682 or jross@cppib.ca. The teleconference will also be webcast live at www.cppib.ca and will be archived shortly thereafter.      

For further information contact:

Ian Dale

Vice President

Communications and Stakeholder Relations

416-868-4086

idale@cppib.ca.

Or

John Cappelletti

Manager

Communications and Stakeholder Relations

416-868-0308

jcappelletti@cppib.ca

August 6, 2004

The CPP Investment Board announced today that the reserve fund grew to $73.2 billion from $70.5 billion in the three months ending June 30, 2004, despite a negative 0.3 per cent rate of return for the period. Changes in the reserve fund at any given quarter are the result of investment earnings and contributions to the CPP, net of benefits paid.

The $2.7 billion overall growth of the reserve fund was the result of $2.9 billion in contributions net of benefits less the investment loss of $227 million.

The equities and real estate portion of the overall portfolio gained 0.8 per cent during the quarter producing an investment gain of $267 million. This gain was offset by a decline in the fixed-income portfolio, due to rising interest rates, of 1.3 per cent or $494 million for a net investment loss of 0.3 per cent, or $227 million.

"These flat results are no surprise after four consecutive quarters of strong investment performance in both equities and fixed income,: said John MacNaughton

 President and CEO of the CPP Investment Board. "What is noteworthy is that fixed income returns are not always positive. Just like equities, bond prices also experience short-term swings. This is one of the reasons we have been steadily diversifying the portfolio over the last five years away from an exclusive reliance on bonds, as part of our long-term strategy to help sustain the CPP."

At June 30, 2004, the assets of the Canada Pension Plan consisted of $37.4 billion in bonds and money market securities, and $35.8 billion in publicly traded stocks, private equities, real estate and infrastructure. 

The bonds and cash held in Ottawa are gradually being transferred to the CPP Investment Board. The transfer of bonds began on May 1, 2004, and will take three years to complete. The transfer of cash will begin in September 2004, and take a year to complete. 

Based on actuarial projections, CPP contributions are expected to exceed benefits until 2021, providing a 17-year period before a portion of the investment income is needed to help pay CPP benefits.

The CPP Investment Board is a Crown corporation created by an Act of Parliament in December 1997. It invests in capital markets the funds not needed by the Canada Pension Plan to pay current pensions. Cash flows are currently invested in equities and real estate to balance the cash and bonds owned by the Canada Pension Plan. By increasing the long-term value of funds, the CPP Investment Board will help the Canada Pension Plan to keep its pension promise to Canadians. Based in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm's length from governments. Its fiscal year is from April 1 to March 31. For more information about the CPP Investment Board, visit www.cppib.ca.

A teleconference has been scheduled for Friday August 6, 2004, at 11 a.m. ET to discuss these results. Journalists who wish to participate should contact Jennifer Ross at 416-868-4682 or jross@cppib.ca. The teleconference will also be webcast live at www.cppib.ca and will be archived shortly thereafter.      

For further information contact:

Ian Dale

Vice President

Communications and Stakeholder Relations

416-868-4086

idale@cppib.ca.

Or

John Cappelletti

Manager

Communications and Stakeholder Relations

416-868-0308

jcappelletti@cppib.ca

Privacy Preferences
When you visit our website, it may store information through your browser from specific services, usually in form of cookies. Here you can change your privacy preferences. Please note that blocking some types of cookies may impact your experience on our website and the services we offer.