CPP Fund Earns 1.2 Per Cent on Strength of Fixed Income.TORONTO -- Fiscal 2005 second-quarter results: CPP cpp - C preprocessor. reserve fund grows to $75.2 billion The CPP Investment Board announced today that for the three months ending September 30, 2004, assets available to the Canada Pension Plan The Canada Pension Plan (CPP) is a contributory, earnings-related social insurance program. It forms one of the two major components of Canada's public retirement income system, the other component being Old Age Security (OAS). earned $906 million, producing a rate of return of 1.2 per cent. During the six months ending September 30, 2004, assets available to the Canada Pension Plan earned $679 million, producing a rate of return of 0.9 per cent. The CPP reserve fund grew to $75.2 billion from $73.2 billion in the three months ending September 30, 2004, due to investment earnings and contributions to the CPP net of benefits paid. The $2 billion growth of the reserve fund was the result of $906 million in investment earnings plus $1.1 billion in contributions to the CPP net of benefits paid. The equities, real estate and infrastructure portions of the overall portfolio were down slightly on the quarter to negative 0.02 per cent while the fixed income portfolio gained 2.2 per cent. "Our focus remains on the long term," said John MacNaughton, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of the CPP Investment Board, "we are continuing to broadly diversify diversify To acquire a variety of assets that do not tend to change in value at the same time. To diversify a securities portfolio is to purchase different types of securities in different companies in unrelated industries. the portfolio in order to help ensure sustainability of the CPP for generations to come." At September 30, 2004, the assets of the Canada Pension Plan consisted of $35.6 billion in bonds and money market securities, and $39.6 billion in publicly traded stocks, private equities, real estate and infrastructure. The bonds and cash operating reserve In power systems, the operating reserve is the generating capacity available to the system operator within a short interval of time to meet demand in case a generator is lost or there is another disruption to the supply. 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 the cash operating reserve began in September 2004, and will be completed in August 2005. Based on actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin 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 Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-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 gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. and managed independently of the Canada Pension Plan and at arm's length arm's length adj. the description of an agreement made by two parties freely and independently of each other, and without some special relationship, such as being a relative, having another deal on the side or one party having complete control of the other. 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 November 5, 2004, at 12 p.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. |
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