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Returns on pension funds in 2010
The rebound of the global economy in 2009 continued in 2010, a trend that was beneficial for financial markets. However, the recovery was weakened in the second quarter of 2010 by the loss of confidence among investors in the capacity of certain European countries and the United States to repay their debts. Those events motivated European and American authorities to implement new budgetary and monetary measures. Those interventions, combined with the strong growth of emerging economies, allowed a progressive return of confidence among investors and resulted in a sustainable recovery in developed economies. In addition, they were instrumental in the stock market rebounds recorded in 2010 last quarter.
For Canadian institutional investors, 2010 financial markets were characterized by:
- The good performance of Canadian and international stock markets;
- The price drift of raw materials;
- The good performance of Canadian bond markets;
- The rise of the Canadian dollar compared with the euro and the US dollar;
- The slow recovery of international real estate markets.
Summary of returns generated in 2010 by public sector pension plan funds managed by the Caisse de dépôt et placement du Québec
The Caisse de dépôt et placement du Québec (CDP) administers the five following 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.
Those funds are managed within the framework of 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 related to each fund and the CDP. Regarding the investment policy of the RPCHCN fund and the special plans fund, which is mainly made up of the assets of the Pension plan for federal employees transferred to employment with the gouvernement du Québec (PPFEQ), it is established by CARRA, jointly with the CDP.
In order to meet the targets set in the investment policy, assets are distributed among at least 13distinct categories, particularly bonds, Canadian and Foreign Equity, Private Equity, Infrastructures and Real Estate.
The choice of assets categories and the proportion of assets in each category explain the annual return difference that can be observed between the five funds.
The evolution of assets and the average annual returns of different periods are shown below for each fund.
The RREGOP Fund
Additional information: Returns of RREGOP 
The RREGOP fund assets rose from 37.2 billion dollars as at December 31, 2009 to 41.3 billion dollars as at December 31, 2010.
RREGOP Fund — Rates of Return
2010
(1 year) | 2007 to 2010
(4 years) | 2006 to 2010
(5 years) | 2001 to 2010
(10 years) | 1991 to 2010
(20 years) |
|---|
| 13,4% | -0,3% | 2,4% | 3,7% | 7,6% |
The PPMP Fund
Additional information: Returns of PPMP
The PPMP fund assets rose from 6.4 billion dollars as at December 31, 2009 to 6.8 billion dollars as at December 31, 2010.
PPMP Fund — Rates of Return
2010
(1 year) | 2007 to 2010
(4 years) | 2006 to 2010
(5 years) | 2001 to 2010
(10 years) | 1991 to 2010
(20 years) |
|---|
| 13,3% | -0,1% | 2,8% | 3,7% | 7,6% |
The PPEMO Fund
The PPEMO fund assets rose from 139.4 million dollars as at December 31, 2009 to 156.2 million dollars as at December 31, 2010.
PPEMO Fund — Rates of Return
2010
(1 year) | 2007 to 2010
(4 years) | 2006 to 2010
(5 years) | 2001 to 2010
(10 years) | 1991 to 2010
(20 years) |
|---|
| 13,6% | -0,3% | 2,7% | 3,9% | 7,8% |
The Special Plans Fund
The special plans fund assets declined from 216.0 million dollars as at December 31, 2009 to 172.9 million dollars as at December 31, 2010. This is explained by the withdrawal on July 1, 2010 of the assets of the Retirement Plan for Active Members of the Centre hospitalier Côte-des-Neiges (RPCHCN) and their transfer to a new exclusive fund for the plan.
Special Plans Fund — Rates of Return
2010
(1 year) | 2007 to 2010
(4 years) | 2006 to 2010
(5 years) | 2001 to 2010
(10 years) | 1991 to 2010
(20 years) |
|---|
| 13,5% | -0,2% | 2,6% | 3,8% | 7,2% |
The RPCHCN Fund
The assets of the new RPCHCN fund were valued at 66.1 million dollars as at December 31, 2010. Thefund's return was 10.62% from July 1 to December 31, 2010. For the entire 2010 year, the return of the plan's assets was 13.5%.