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Stock markets give pension plans 3Q boost

Canadian pension plans ‘returned to positive territory’ in the third quarter, according to a study by RBC Investor Services.

MARK BLINCH/REUTERS

Stock market gains helped give Canadian pension plans a boost in the third quarter, according to a report by RBC Investor Services.

The firm said Canadian defined-benefit pensions included in its survey gained 3.2 per cent in the quarter ended Sept. 30, compared with a loss of 1.1 per cent in the second quarter.

"Canadian defined-benefit pension plans returned to positive territory, driven by the financials, energy and materials sectors as global markets continued their liquidity-driven climb from the summer lows," said Scott MacDonald, head of pensions, insurance, and sovereign wealth strategy for the bank's investor services division.

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"Despite headwinds from deteriorating economic conditions in Europe and China, as well as lacklustre economic news from the U.S., this rally was driven by major central banks pledging further monetary support which led to a positive performance for commodities and energy-based stocks."

Canadian stocks had a strong showing as the S&P/TSX composite index gained 7 per cent.

The S&P500 returned 6.4 per cent in U.S. dollars compared with a 2.7-per-cent gain in Canadian dollar terms. The MSCI World Index returned 5.6 per cent in local currencies compared with 3 per cent in Canadian dollars.

Meanwhile, the DEX Universe Bond Index gained 1.2 per cent over the third quarter compared with 2.3 per cent return in the second quarter.

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