Financial position of the Plan

Net assets available for benefits

The Canada Post Corporation Registered Pension Plan posted a 0.9% return in 2018. The Plan ended the year with net assets available for benefits of $24,715 million (including $46 million in the DC component), a decrease of $367 million from $25,082 million (including $37 million in the DC component) at the end of 2017.

Changes in net assets available for benefits

The $367 million decrease in net assets available for benefits represented investment income of $243 million and contributions of $523 million, offset by pension benefit payments of $1,007 million and expenses of $126 million..

Investment income – comprising interest, dividend, as well as realized and unrealized gains and losses – was $243 million for 2018, compared to $2,439 million for 2017.

Plan contributions in 2018 were $523 million compared to $542 million in 2017, a decrease of $19 million.

Pension benefit payments for 2018 were $1,007 million compared to $976 million in 2017, an increase of $31 million. This was mostly the result of a 4.44% increase in the number of retirees over 2017.

Contributions to the Plan (in millions) 2017 2018
Members $234 $234
Canada Post current service 269 254
Canada Post special payments 34 30
Total contributions $537 $518
Benefits payments (in millions) 2017 2018
Total benefits paid $976 $1,007

Changes in pension obligations

Pension obligations were $21,574 million (including $46 million in the DC component) compared to $20,827 million (including $37 million in the DC component)in 2017, an increase of $747 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, 2018, resulted in a surplus of $3,141 million, as disclosed in the financial statements based on standards of the Chartered Professional Accountants of Canada (CPA Canada).

The going-concern surplus as of the same date was estimated at $3,317 million. The difference between the accounting surplus of $3,141 million and the estimated going-concern surplus of $3,317 million was an actuarial asset value adjustment (or smoothing) of $176 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.