News Releases

Canada Post Pension Plan Extends Strong Results in 2005

April 19, 2006

Canada Post Corporation today announced strong financial results for its Registered Pension Plan in 2005, the fifth full year of operation.

At December 31, 2005, the Registered Pension Plan held total assets of $12.131 billion compared with $10.214 billion the previous year, representing an increase of $1.917 billion. The Canada Post Pension Plan, one of the largest in the country, earned a solid return of 13.7% over the year.

"The Canada Post Pension Plan provides one of the best benefits retirement packages in Canada and requires the Corporation to achieve strong returns on its invested assets to meet its legal obligations," said Moya Greene, Canada Post's President and CEO.

The 2005 returns exceeded the benchmark return of 11.2% representing the blended return of various Canadian, U.S. and international stock and bond market indices weighted in accordance with the Canada Post asset mix target. Despite difficult economic conditions in 2001 and 2002, the fund earned a respectable annualized rate of return of 7.1% over the last five years against the benchmark return of 4.4%.

Canadian and international equity markets provided strong returns during the year on record oil prices and robust economic growth while U.S. markets showed modest gains. Fixed income returns were also positive as long-term interest rates continued to fall. Despite the strong return on assets, the ongoing decline in long-term interest rates led to an increase in calculated pension obligations, keeping the Plan in a solvency deficit position.

"Like many other pension plans in Canada and worldwide, the continuing decline in certain benchmark interest rates in 2005 led to increases in pension liabilities relative to pension assets," said Douglas Greaves, Vice-President Pension Fund and Chief Investment Officer. "On a long-term, or "going concern" basis, the Plan is fully funded and Canada Post has the financial strength to meet all its obligations."

The Corporation, as Plan sponsor, made additional contributions of $302 million in 2005, over and above the normal contribution of $269 million, to further strengthen its funded position.

The Canada Post Pension Plan a defined benefit plan that provides inflation-protected benefits, has more than 71,000 active members, retired members, deferred pensioners and beneficiaries.