April 09, 2009 15:46 ET

Canada Post Pension Plan 2008 Results

OTTAWA, ONTARIO--(Marketwire - April 9, 2009) - Canada Post has announced 2008 financial results for the Canada Post pension plan (the Plan). At December 31, 2008, the Plan held total net assets of $11,709 million compared with $14,666 million the previous year, representing a decrease of $2,957 million. The Plan earned a rate of return of negative 19.3% over the year against a benchmark return of negative 17.6%. This was the first time since the Plan's inception eight years ago that its rate of return under-performed its benchmark.

The year 2008 was an extremely difficult one with financial and economic turmoil. In Canada and around the world, financial markets experienced sharp declines. Fortunately, the Plan was one of the few pension plans in Canada to begin 2008 with a solvency surplus, somewhat easing the impacts of the financial market decline. The Plan ended the year with an estimated solvency deficit of $1,190 million as of December 31, 2008. This represented a solvency funding ratio of 91%, significantly better than most large Canadian pension plans.

"Despite the disappointing 2008 investment returns, at December 31, 2008 the Plan is fully funded on a going-concern basis, with an estimated surplus of $675 million," said Douglas Greaves, Vice-President Pension Fund and Chief Investment Officer. "While the short-term impact on investment returns has been negative, the Plan is designed to achieve the long-term returns required to fund pension benefits for members, retirees and beneficiaries."

"As the Plan sponsor, the financial risk in providing a defined benefit pension plan rests with Canada Post. Therefore the best security for members is a financially-strong Plan sponsor," said President Moya Greene. "Our plan remains in good shape despite the current economic situation."

The Canada Post pension plan is a defined benefit plan that provides inflation-protected benefits to almost 80,000 active members, retired members, deferred pensioners and beneficiaries.

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