Defined benefit pension plans in Ontario reported a median solvency ratio of 122 per cent during the first quarter of 2026, according to a new report by the Financial Services Regulatory Authority of Ontario.
The projected median solvency ratio for the reporting period ending March 31, 2026, decreased compared to the two consecutive quarters at a record high of 124 per cent. The report noted inflationary pressures, geopolitical tensions and slowing global growth are contributing to an uncertain economic and financial environment.
Read: Ontario DB plans’ average solvency ratio stays flat at 124% in Q4 2025: FSRA
The percentage of pension plans that were projected to be fully funded on a solvency basis as at March 31 was 90 per cent, compared to 92 per cent as at Dec. 31. Only two per cent of plans had a solvency ratio below 85 per cent, the same percentage since last quarter.
Investment returns for the quarter averaged 0.3 per cent, said the report, noting domestic markets benefited from strong Canadian equities returns offset by a decline in the Canadian dollar and uncertainty from the war in Iran. In fixed income, the Canadian bond yield curve flattened and shifted up, with the two- and 10-year benchmark government bond yields ending the quarter at 2.82 per cent and 3.46 per cent, respectively.
“Solvency levels remain strong overall, but the recent decline highlights the impact of current economic headwinds and the importance of staying forward-looking,” said Andrew Fung, executive vice-president of pensions at FSRA, in a press release.
Read: Ontario pension plan assets grow to $916 billion, membership reaches 4.8 million: FSRA