The funded status of a typical Canadian pension plan increased on both a solvency and accounting basis during the month of May, according to a new report by Telus Health.
The solvency index jumped to 101.1 per cent compared to 98.2 per cent at the end of April, while the accounting index increased from 99.5 per cent to 101.9 per cent.
Read: Report finds average Canadian DB pension plan returns -1.7% in April
A representative pension plan portfolio returned 2.7 per cent during the month, due in part to a rebound in the equities market following months of decline, the report said. Canadian equities returned 5.6 per cent during the month and global developed and emerging equity markets index returned 5.3 per cent.
Short- and long-term government bond yields were both positives to pension plans during May with an increase of approximately 0.12 per cent for short-term bonds and 0.05 per cent for long-term ones. Market expectations for long-term inflation increased to 1.88 per cent at the end of May, compared to 1.82 in April.
It noted there’s been more than nine per cent swings in solvency funded ratios so far in 2025, showing just how quickly pension plan health can change given the volatility seen in the market.
“The resilience of Canadian pension plans amid economic headwinds is both encouraging and cautionary,” said Andrea Knoll, partner and west region lead of Telus Health’s consulting team, in a press release.
Read: Solvency ratio of average pension fund drops 2.3% in Q1 2025: report