The CPP fund grew to $98 billion in the year ending March 31 2006, an increase of $16.7 billion from the previous year. The gains included $13.1 billion in investment gains and $3.6 billion in additional CPP contributions.
The CPP fund invests investment earnings and contributions that are not needed to pay current CPP benefits.
The fund earned a 15.5 per cent rate of return in the past 12 months, which compares to the 14.9 per cent median return for Canadian pension plans over the same period and an 8.5 per cent return the previous year.
The fund's Canadian equity holdings were up 29.9 per cent, and accounted for roughly 85 per cent of the fund's gains.
"Our key investment goal this year was to further diversify the portfolio by risk/return attributes and geography, " says David Denison, president and CEO of the CPP Investment Board. "As a result we increased our investments in real estate, inflation-linked bonds and infrastructure to $8.5 billion, or 8.7 per cent, of the overall portfolio from just $1 billion, or 1.2 per cent, at the beginning of the year. "
Mr. Denison says the fund intends to invest more of its money in international markets to reduce risk and the current "over-dependence" on the domestic economy.
Based on actuarial projections, CPP contributions are expected to exceed benefits until 2022, providing a 16-year period before any of the investment income is needed to pay CPP benefits.
