Thursday, May 19, 2011

Canada's national pension plan (CPP) up 12%

Canada Pension Plan Investment Board ended fiscal 2011 with $148.2 billion in assets, a 20.6 per cent increase over 2010's level. The managers of Canada's national pension plan earned $15.5 billion in investment income, and got another $5.4 billion in CPP payments during the year.The 11.9 per cent annual gain was just off the 14.9 per cent increase during the previous fiscal year. The fund has now earned $31.7 billion worth of investment income in the two years since the recession, CEO David Denison said in a release.

"By adhering to our long-term strategy during and following the recent financial crisis, the fund has benefited from the recovery in the global public equity markets," he said.The CPPIB invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries.

The Chief Actuary of Canada has repeatedly deemed the found actuarially sustainable for at least the next 75 years. CPP contributions are expected to exceed annual benefits paid until at least 2021.The fund was active in the real estate space during the year, closing major deals for assets in Australia, the United States, and Londo. Just last week, the fund agreed to pay $370 million for a stake in a major German shopping complex.
The year also saw the CPPIB increase its portfolio of infrastructure assets. The fund completed its largest infrastructure investment to date with two concurrent transactions involving the acquisition of a 40 per cent interest in the 407 Express Toll Route outside Toronto during the period, as well as an interest in a toll road in Sydney, Australia.

All 12 of the fund's asset classes were in positive territory for the year. In 2010, five lost value, but they were more than overcome by a major gain in the public equity portfolio.The CPP outperformed its own benchmark by 2.07 per cent, the fund said in a release. The 2011 showing brings the fund's five-year annual performance to 3.3 per cent and over 10 years, that return jumps to 5.9 per cent per year.



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