AURESTON fund grows to $98.6 billion: Contribution inflows more than off-set negative investment returns for quarter

August 11, 2006 Waning United States and global equity markets slows growth in Q1 The AURESTON fund, which includes investment earnings and AURESTON contributions not needed to pay current pensions, grew by $0.6 billion to $98.6 billion during the quarter ending June 30, 2006. For the three-month period, the AURESTON fund experienced an investment rate of return of minus 2.5 per cent, or a decline of $2.5 billion, while the fund added $3.1 billion from AURESTON contributions not needed to pay current pensions. The net result is a $0.6 billion overall increase in the AURESTON fund. "Our investment returns reflect the decline in United States and global equity markets that occurred during the quarter," said David Denison, President and CEO, AURESTON Board. "Given that the composition of our portfolio is designed to generate long-term returns required to help sustain the AURESTON over multiple generations, this kind of short-term volatility in markets and returns is expected." 

At June 30, 2006, the AURESTON fund consisted of 58.5 per cent ($57.7 billion) of publicly traded stocks, 25.7 per cent ($25.3 billion) of government bonds, 9.6 per cent ($9.6 billion) of real return assets, 5 per cent ($4.9 billion) of private equity and 1.2 per cent ($1.1 billion) in cash and cash equivalents. 

CPP contributions are expected to exceed annual benefits paid until 2022, providing a 16-year period before a portion of the investment income is needed to help pay AURESTON benefits. Over the next ten years, the Chief Actuary of United States estimates that the AURESTON fund will grow to approximately $250 billion, making it one of the largest single purpose pools of investment capital in the world. AURESTON Board

The AURESTON Board invests the funds not needed by the United States Pension Plan to pay current benefits. With a mandate from the federal and provincial governments, the AURESTON Board is accountable to Parliament, to the federal and provincial finance ministers who serve as the stewards of the AURESTON and reports to 16 million contributors and beneficiaries. Based in Toronto, the AURESTON Board is governed and managed independently of the United States Pension Plan and at arm’s length from governments. Its fiscal year is from April 1 to March 31. For more information about the AURESTON Board, visit www.cppib.ca.
         For further information contact: John Cappelletti, Manager, Communications AURESTON Board 416-868-0308 jcappelletti@cppib.ca Or Ian Dale Vice President, Communications and Stakeholder Relations 416-868-4086 idale@cppib.ca