Canada in Top Five for Pension Fund Assets

Canada now ranks No. 5 globally by share of pension fund assets, according to new research by Willis Towers Watson. What does this mean for advisors and their clients?

The report, which looks at the 300 largest pension funds worldwide in 2016, shows that Canada accounts for 5.4 per cent of total pension fund assets (up from 5.3 per cent in 2015), displacing the U.K. (which dropped to 4.8 per cent from 5.4 per cent the previous year) from the top five. The U.S. continues to hold its position as the country with the largest share of pension assets across the top 300 funds, representing 38.6 per cent spread across 134 funds.

The Canada Pension Plan is the world’s eighth-largest pension fund overall and fifth largest among sovereign pension funds. The Ontario Teachers’ Pension Plan ranked 18^th overall, while 16 other Canadian pension plans also made the global top 300.

Total assets under management for the world’s 300 largest pension funds increased in value by 6.1 per cent in 2016, representing $15.7 trillion. Among sovereign pension funds, assets increased by 6.5 per cent over the period, following a decrease of 0.8 per cent in 2015.
 

While all of this is good news for Canada as a country, what does it mean for advisors and their clients? It’s a reminder that the Canada Pension Plan is an integral part of individuals’ retirement income, and advisors should be helping clients optimize CPP benefits through strategies such as CPP income splitting, or deciding when to receive CPP — before, at or after age 65.

The CPP Income Calculator (free trial available) is a powerful tool to help advisors offer the best advice to clients. It considers factors such as the client’s expected CPP retirement benefits at age 65, life expectancy, retirement age, estimated employment or self-employment income after age 60, how long he or she will continue to make CPP contributions, and expected inflation rate to determine the best age to start receiving CPP based on total benefits over the client’s lifetime.

Additional educational resources:
MFA-Retirement and Estate Services Specialist designation
CPP Income Calculator
Tax Efficient Retirement Income Calculator
 

©2017 Knowledge Bureau Inc. All Rights Reserved.

Refer a Friend	Research	Calculators	Course Trials