Canada's national pension plan gained $21.7 billion in assets in its last fiscal year, a return on investment of more than 10 per cent and better than five times the current inflation rate.
The Canada Pension Plan Investment Board (CPPIB) had $183.3 billion in assets at the end of March, the end of the plan's fiscal year. That's up from $161.6 billion at the end of last year.
The increase was attributed to $16.2 billion in investment returns and $5.5 billion in net new contributions from plan members.
CPPIB is the agency responsible for investing the pension fund assets not currently needed to pay benefits on behalf of 18 million contributors and beneficiaries. The Chief Actuary of Canada says that at the current contribution rate, the Canada Pension Plan should remain sustainable for the next 75 years.
The actuary says contributions should be more than enough to outpace benefit payments until 2021 when the balance may start to shift.
"While the strength of public equity markets was the leading factor in the solid annual return this year, CPPIB’s active investment programs also contributed to the portfolio's performance," CPPIB's president and CEO Mark Wiseman said in a press release.
Foreign holdings make up bulk of assets
In the past year, CPP made 36 different investments abroad worth more than $200 million in 11 countries. As it stands, Canadian assets make up 36.7 per cent of the CPPIB's assets. Foreign holdings — everything from toll roads in Chile to shopping malls in Australia — make up the remaining 63.3 per cent overseas.
Over the past five years, CPPIB has shown a nominal rate of return of 4.2 per cent per year. When spread over the past decade, the performance was 7.4 per cent per year.