CPP investment fund grows to $192.8 billion

The corporate logo of Canada Pension Plan Investment Board (CPPIB) is shown. (THE CANADIAN PRESS / HO)

TORONTO -- The Canadian Pension Plan Investment Board earned a 1.8 per cent return on investment in the second quarter, as it saw gains in foreign markets and made several significant investments abroad.

CPPIB says it had net assets of $192.8 billion at Sept. 30, up from $188.9 billion at the end of the previous quarter.

The gain included $3.3 billion in net investment income and $600 million in net CPP contributions from Canadian employees and employers.

Some of the investments made during this quarter included US$6 billion for a 50 per cent stake in luxury U.S. retailer Neiman Marcus Group LTD Inc.; $170 million for a 24 per cent interest in Calgary-based oil and gas producer TORC Oil and Gas Ltd. and $480 million for a 27.6 per cent interest in Brazilian real estate company Aliansce Shopping Centers S.A.

"Domestic and foreign equity markets, and gains in each of our active investment programs, contributed to the increase in the CPP Fund during the quarter," Mark Wiseman, president and CEO of the CPP Investment Board said in a statement.

Wiseman said the fund manager will continue to "diversify the portfolio and during the reporting period we made significant investments in eight different countries."

Earlier this week, Finance Minister Jim Flaherty said an expanded CPP fund is a good idea, but it should only be considered when there's more strength in the economy and global economic risks lessen.

Several provinces, particularly Ontario, have been pushing for action on the CPP for years, but have been held back by opposition from Quebec and Alberta, as well as the soft economic outlook.

In December 2010, Ottawa and the provinces agreed to a half-way measure by creating so-called voluntary pooled registered plans.

But this year, Prince Edward Island forwarded its own plan for expanding the CPP starting in 2016, which calls for boosting maximum CPP contributions to $4,681.20 a year from $2,356.20 over a three-year period starting in 2016. It also wants to hike the maximum annual benefit to $23,400 from $12,150.

Premier Kathleen Wynne has also hinted that Ontario is prepared to expand the CPP on its own if no other provinces do not join it.

Several business lobby groups have been opposed to the idea, instead, advocating for Canadians to find alternate plans for retirement, including pooled pension plans and other forms of savings without increasing the cost to business owners.

The CPP Investment Board, one of the world's largest pension funds, invests money not needed by the Canada Pension Plan to pay benefits for current retired contributors.