Financial position of the Plan

Net assets available for benefits

The Canada Post Corporation Registered Pension Plan posted a 9.4% return in 2020. The Plan ended the year with net assets available for benefits of $29,757 million.(including $101 million in the DC component), an increase of $2,001 million from $27,756 million (including $71 million in the DC component) at the end of 2019.

Changes in net assets available for benefits

The $2,001 million increase in net assets available for benefits represented investment income of $2,583 million and contributions of $633 million, offset by pension benefit payments of $1,072 million and expenses of $143 million.

Investment income – comprising interest, dividend, as well as realized and unrealized gains and losses – was $2,583 million for 2020, compared to $3,608 million for 2019.

Plan contributions in 2020 were $633 million compared to $621 million in 2019, an increase of $12 million.

Pension benefit payments for 2020 were $1,072 million compared to $1,053 million in 2019, an increase of $19 million. This was mostly the result of a 3.64% increase in the number of retirees over 2020.

Contributions to the Plan (in millions) 2019 2020
Members $281 $281
Canada Post current service 276 301
Canada Post special payments 44 24
Total contributions $601 $606
Benefits payments (in millions) 2019 2020
Total benefits paid $1,049 $1,068

Changes in pension obligations

Pension obligations were $24,149 million (including $101 million in the DC component) compared to $22,504 million (including $71 million in the DC component) in 2019, an increase of $1,645 million.The increase was mainly due to interest accrued on the pension obligations, new benefits accrued and changes in actuarial assumptions partially offset by benefits paid and experience gains.

Surplus (deficit)

The difference between assets available for benefit and pension obligations as at December 31, 2020, resulted in a surplus of $5,608 million, as disclosed in the financial statements based on standards of the hartered Professional Accountants of Canada (CPA Canada).

The going-concern surplus as of the same date was estimated at $3,818 million. The difference between the accounting surplus of $5,608 million and the estimated going-concern surplus of $3,818 million was an actuarial asset value adjustment (or smoothing) of $1,790 million. The smoothed assets valuation method recognizes gains or losses on investments over a five-year period to minimize fluctuations due to market volatility. This actuarial adjustment is no longer permitted as a valuation methodology for accounting purposes under CPA Canada Section 4600 since 2011.