Canadian pension plans returns soared 142 in 2013 on back of global

TORONTO — A rally on global stock markets helped Canadian pension plans post a strong fourth quarter, according to a study by the Royal Bank.RBC Investor and Treasury Services says the median defined benefit pension plan among those examined earned 6.1% in the fourth quarter of 2013 and 14.2% for the full year.Foreign stocks were the top asset class for the plans last year, with an increase of 35.8% over 2012 values.Plans saw their Canadian stock holdings gain 19.4% for the year, RBC said.The gains came as fixed income investments such as bonds posted their biggest drop since 1994, losing 1.3% in 2013.However, the drop in fixed income investments came amid an increase in long-term interest rates — an important factor in calculating pension plan liabilities.“Pensions gained a lot of traction in 2013,” said Scott MacDonald, managing director of pensions for RBC Investor and Treasury Services.“Strong equity gains and a weaker Canadian dollar led to an increase in assets, while higher long term bond yields reduced most plan liabilities, which will please sponsors.”

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