The average Canadian defined benefit pension plan returned 4.4 per cent in the third quarter of 2025, up from 1.6 per cent in the second quarter, according to a new report by the Royal Bank of Canada Investor Services.
This growth was driven by a broad-based mix of equity and fixed income contributions, the report said.
Canadian equities returned 9.5 per cent with significant gains in the information technology (13.2 per cent), energy (12.6 per cent) and financials (10.6 per cent) sectors. U.S. equities increased by 10.3 per cent, with IT and communications posting the biggest gains (15.4 per cent and 14.2 per cent, respectively). Global equities also strengthened over the period, returning 8.7 per cent for the quarter.
Read: Average Canadian DB plan achieves 1.6% investment return in Q2 2025: report
Fixed income assets performed well across the yield curve, supporting overall portfolio performance with a return of 1.5 per cent. The FTSE Canada overall bond index also rose by 1.5 per cent, with medium-term bonds generating the strongest returns at two per cent.
A separate report by BNY Mellon found the average DB plan returned 3.98 per cent for the third quarter. Among traditional asset classes, Canadian equities posted the highest performance, with a quarterly median return of 8.99 per cent. By comparison, Canadian fixed income returned just 1.71 per cent.
Within alternative assets, private equity returned 5.41 per cent, followed by hedge funds (5.08 per cent) and real estate (1.57 per cent).
“Inflation remained elevated in many regions with tariffs and political tensions continuing to be a major concern,” said David Cohen, director of global risk solutions at BNY Mellon, in a press release. “We are also witnessing slowing global economic growth. Despite these conditions, Canadian pension plans delivered strong performance in the quarter with positive contributions from all major public and private asset classes.”
Read: Average solvency ratio of Canadian DB plans increase to 126% in Q2 2025: report