TORONTO, ONTARIO — (Marketwire) — 02/15/13 — The CPP Fund ended the third quarter of its 2013 fiscal year on December 31, 2012 with net assets of $172.6 billion, compared to $170.1 billion at the end of the previous quarter. The $2.5 billion increase in net assets after operating expenses resulted from $5.0 billion in investment income and $2.4 billion of seasonal cash outflows. The CPP Fund routinely receives more CPP contributions than are required to pay benefits during the first part of the calendar year and then remits a portion of those funds for benefit payments in the latter part of the year. The portfolio had a gross investment return of 3.0% for the quarter.
For the nine month fiscal year-to-date, the CPP Fund increased by $11.0 billion from $161.6 billion at March 31, 2012. This includes $9.0 billion in investment income before operating expenses, representing a gross investment return of 5.5% for this period, and $2.4 billion in net CPP contributions.
“We continued to see solid returns this quarter due to strong increases in global public equity markets and income generated by the portfolio-s private assets,” said Mark Wiseman, President and CEO, CPP Investment Board (CPPIB). “This quarter-s results reflect the strength and capabilities of our diversified global platform, as all investment groups delivered gains.”
Investment highlights during the fiscal third quarter include:
Long-Term Sustainability
In the latest triennial review released in November 2010, the Chief Actuary of Canada reaffirmed that the CPP remains sustainable at the current contribution rate of 9.9% throughout the 75-year period of his report. The Chief Actuary-s projections are based on the assumption that the Fund will attain an annualized 4.0% real rate of return. The 10-year annualized nominal rate of return of the Fund is 6.7%.
The Chief Actuary-s report also indicates that CPP contributions are expected to exceed annual benefits paid until 2021, providing an eight-year period before a portion of the investment income from the CPPIB will be needed to help pay pensions.
About CPP Investment Board
CPP Investment Board is a professional investment management organization that invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 18 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, the CPP Investment Board invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in London and Hong Kong, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm-s length from governments. At December 31, 2012, the CPP Fund totalled $172.6 billion. For more information about the CPP Investment Board, please visit .
Contacts:
CPP Investment Board
Linda Sims
Director, Media Relations
(416) 868-8695