Pension funds performance

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Returns on pension funds in 2012

The year 2012 was marked by concerns over the global economic plan. Some European countries have encountered financing problems and the Euro zone entered into recession. In the United States, the risk of a fiscal cliff lasted several months. Finally, several emerging countries have experienced an economic growth slowdown. Nevertheless, the financial markets have progressed relatively well in 2012, since several businesses continue to perform well and investors anticipate some improvement of the global economy.

The year 2012 was characterized by:

• important returns for the United States, Europe and the emerging economies’ stock market;
• moderate returns for the bond market and the Canadian stock market.

Summary of the returns generated in 2012

The Caisse de dépôt et placement du Québec administers the following 5 funds:

• The Government and Public Employees Retirement Plan (RREGOP) Fund;
• The Pension Plan of Management Personnel (PPMP) Fund;
• The Pension Plan of Elected Municipal Officers (PPEMO) Fund;
• The Special Plans Fund;
• The Retirement Plan for Active Members of the Centre hospitalier Côte-des-Neiges (RPCHCN) Fund.

Each of these funds is managed under an investment policy that sets return targets and risk limits. The RREGOP, the PPMP and the PPEMO investment policies are established jointly by the specific pension committee for each fund and the CDP. In regards to the investment policies of the RRCHCN Fund and the Special Plans Fund, which consist mainly of the assets of the Pension Plan for Federal Employees transferred to employment with the gouvernement du Québec (PPFEQ), it is established by CARRA.

In accordance with the targets set in each investment policy, the funds are diversified. That is why the funds’ assets are distributed among at least 11 distinct classes, particularly bonds, Canadian and international shares, private equity, infrastructure and real estate.

The choice of assets classes and their weight in the assets of each fund explain the difference in annual returns that can be observed between the 5 funds.

The changes in assets and the average annual returns for different periods are shown below for each of the 5 funds.

 

The RREGOP Fund

Additional information: Returns of RREGOP

The assets of the RREGOP Fund increased from $42.0 billion as at December 31, 2011 to $45.1 billion as at December 31, 2012.

	Rate of return
	2012 (1 year)	2009 to 2012 (4 years)	2008 to 2012 (5 years)	2003 to 2012 (10 years)	1993 to 2012 (20 years)
RREGOP Fund	9.7%	9.4%	1.3%	6.5%	7.2%

 

The PPMP Fund

The assets of the PPMP Fund increased from $7.1 billion as at December 31, 2011 to $7.8 billion as at December 31, 2012.

	Rate of return
	2012 (1 year)	2009 to 2012 (4 years)	2008 to 2012 (5 years)	2003 to 2012 (10 years)	1993 to 2012 (20 years)
PPMP Fund	9.2%	9.2%	1.6%	6.7%	7.3%

 

The PPEMO Fund

The assets of the PPEMO Fund increased from $159.4 million as at December 31, 2011 to $173.2 million as at December 31, 2012.

	Rate of return
	2012 (1 year)	2009 to 2012 (4 years)	2008 to 2012 (5 years)	2003 to 2012 (10 years)	1993 to 2012 (20 years)
PPEMO Fund	9.6%	9.2%	1.2%	6.7%	7.5%

 

The Special Plans Fund

The assets of the Special Plans Fund increased from $177.9 million as at December 31, 2011 to $190.1 million as at December 31, 2012.

	Rate of return
	2012 (1 year)	2009 to 2012 (4 years)	2008 to 2012 (5 years)	2003 to 2012 (10 years)	1993 to 2012 (20 years)
Special plans fund	9.2%	9.0%	1.3%	6.7%	6.9%

 

The RPCHCN Fund

The assets of the RPCHCN Fund increased from $64.8 million as at December 31, 2011 to $68.0 million as at December 31, 2012.

	Rate of return
	2012 (1 year)	2009 to 2012 (4 years)	2008 to 2012 (5 years)	2003 to 2012 (10 years)	1993 to 2012 (20 years)
RPCHCN fund	8.8%	9.1%	1.3%	6.7%	6.9%