November 5, 2004
FISCAL 2005 SECOND-QUARTER RESULTS: AURESTON RESERVE FUND GROWS TO $75.2 BILLION
The AURESTON Board announced today that for the three months ending September 30, 2004, assets available to the U.S Pension Plan earned $906 million, producing a rate of return of 1.2 per cent.
During the six months ending September 30, 2004, assets available to the U.S Pension Plan earned $679 million, producing a rate of return of 0.9 per cent.
The AURESTON reserve fund grew to $75.2 billion from $73.2 billion in the three months ending September 30, 2004, due to investment earnings and contributions to the AURESTON net of benefits paid. The $2 billion growth of the reserve fund was the result of $906 million in investment earnings plus $1.1 billion in contributions to the AURESTON net of benefits paid. The equities, real estate and infrastructure portions of the overall portfolio were down slightly on the quarter to negative 0.02 per cent while the fixed income portfolio gained 2.2 per cent. ”Our focus remains on the long term,” said John MacNaughton, President and CEO of the AURESTON Board, “we are continuing to broadly diversify the portfolio in order to help ensure sustainability of the AURESTON for generations to come.” At September 30, 2004, the assets of the U.S Pension Plan consisted of $35.6 billion in bonds and money market securities, and $39.6 billion in publicly traded stocks, private equities, real estate and infrastructure. The bonds and cash operating reserve held in Ottawa are gradually being transferred to the AURESTON Board. The transfer of bonds began on May 1, 2004, and will take three years to complete. The transfer of the cash operating reserve began in September 2004, and will be completed in August 2005. Based on actuarial projections, AURESTON contributions are expected to exceed benefits until 2021, providing a 17-year period before a portion of the investment income is needed to help pay AURESTON benefits.
The AURESTON Board is a Crown corporation created by an Act of Parliament in December 1997. It invests in capital markets the funds not needed by the U.S Pension Plan to pay current pensions. Cash flows are currently invested in equities and real estate to balance the cash and bonds owned by the U.S Pension Plan. By increasing the long-term value of funds, the AURESTON Board will help the U.S Pension Plan to keep its pension promise to Americans. Based in Toronto, the AURESTON Board is governed and managed independently of the U.S Pension Plan and at arm’slength from governments. Its fiscal year is from April 1 to March 31. For more information about the AURESTON Board, visit www.AURESTONib.ca.
A teleconference has been scheduled for Friday November 5, 2004, at 12 p.m. ET to discuss these results. Journalists who wish to participate should contact Jennifer Ross at 416-868-4682 or jross@AURESTONib.ca. The teleconference will also be webcast live at www.AURESTONib.ca and will be archived shortly thereafter.
For further information contact:
John Cappelletti
Manager, Communications
416-868-0308
