As feds, provinces work to expand CPP, fund reports weak first-quarter return
CPPIB's 1.45 per cent return on investment for Q1 of its fiscal 2017 is well-below the fund's long-term performance over the past decade
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TORONTO—The Canada Pension Plan Investment Board, the largest pension fund in the country, is reporting a 1.45 per cent return on investments in the first quarter of its 2017 fiscal year, well below its long-term performance over the past decade.
Despite the weak start, the fund’s 10-year rate of return was 5.5 per cent after accounting for inflation—above the chief actuary’s benchmark of 4.0 per cent annualized real rate of return.
At the end of June, the fund had $287.3 billion of net assets, up $8.4 billion from the end of March.
The increase included $4.1 billion from investments after costs and $4.3 billion in additional contributions from employees and employers covered by the Canada Pension Plan (CPP).
The board’s report comes as most of the federal, provincial and territorial governments work towards an expansion of CPP, a move that would eventually increase contributions as well as benefits paid out to retirees over the long term.
The report is also the first for the Toronto-based fund manager since the departure of Mark Wiseman, who has been replaced as president and CEO by Mark Machin.
Meanwhile, the Canadian Federation of Independent Business (CFIB) is continuing its lobbying effort to ensure a public consultation and economic analysis of the proposed CPP expansion take place before any deal is ratified.
The small business organization said while proponents describe the contribution increase as “modest,” the hike will hit independent owners hard. In a recent survey, 70 per cent of business owners said they disagree with the notion that the proposed increase is modest and that it will have a limited impact on business.