Employee pension plans have bounced back rapidly since the financial crisis, with assets climbing by 67 per cent since hitting rock bottom in the first quarter of 2009.
Statistics Canada data on employer-sponsored pension plans shows Canadian plans had assets totalling $1.34-trillion at the end of 2013, an increase of 67 per cent from $804-billion in the first quarter of 2009 after pension plans saw their assets sink during a global stock market meltdown.
Pension fund assets climbed by 12 per cent in 2013 alone - and 5.8 per cent in the fourth quarter last year - as strong stock market performance pushed up the value of pension funds' investment portfolios.
A major source of revenue for pension plans last year came from selling securities in overheated markets. Statscan said net profit from sales of securities climbed 31 per cent to over $45-billion in 2013.
Stocks were the key asset class for most funds, with equity holdings climbing by 15.4 per cent in 2013, including 9.4 per cent in the fourth quarter. Bond holdings increased by 4.1 per cent in 2013 and real estate assets climbed by 12 per cent last year.
Pension funds have increasingly diversified into non-Canadian investments and held 34 per cent of their holdings in foreign assets at the end of 2013, an increase from 31 per cent a year earlier.
The Statscan data shows pension funds for private sector employees had total assets of $420-billion at the end of 2013, while public sector plans for government employees had assets of $920-billion.
Editor's note: The year pension plans hit bottom has been corrected in the online version of this story.