February 08, 2007
TORONTO (February 8, 2007): 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 December 31, 2006. For the quarter, the CPP fund experienced an investment rate of return of 8.7 per cent, or an increase of $8.9 billion, while the fund paid out $1.4 billion for CPP benefits as it typically does in the latter part of the calendar year. The result is a $7.5 billion overall increase in the CPP fund since September 30, 2006. During the nine months ending December 31, 2006, the CPP fund experienced a year-to-date investment rate of return of 10.1 per cent, or $10.3 billion, while the fund added $2.5 billion from CPP contributions not needed to pay current pension benefits. The result is a $12.8 billion overall increase in the CPP fund from April 1, 2006 to December 31, 2006. “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. “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 December 31, 2006, the CPP fund consisted of equities –– 66.8 per cent ($74.1 billion), of which public equities made up 60.4 per cent ($67.0 billion) and private equities 6.4 per cent ($7.1 billion); bonds –– 22.6 per cent ($25.1 billion); inflation-sensitive assets –– 9.9 per cent ($10.9 billion); and cash and cash equivalents –– 0.7 per cent ($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 ten 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.
CPP Investment Board The CPP Investment Board invests the funds not needed by the Canada Pension Plan to pay current benefits. With a mandate from the federal and provincial governments, the CPP Investment Board is accountable to Parliament, to the federal and provincial finance ministers who serve as the stewards of the CPP and to 16 million contributors and beneficiaries. 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.
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