The median solvency ratio of Ontario’s defined benefit pension plans reached 119 per cent during the first quarter of 2025, according to a new report by the Financial Services Regulatory Authority of Ontario.
The solvency ratio declined by three percentage points as at March 31, 2025, compared to the previous quarter. This is the first significant decline after staying relatively flat throughout 2024, the FSRA noted.
Read: Ontario DB pension plans’ average solvency ratio increases to 123% in Q2 2024: FSRA
Nine in 10 (89 per cent) of Ontario DB plans are projected to be fully funded on a solvency basis, compared to 91 per cent at the end of 2024. Only three per cent of plans had a solvency ratio below 85 per cent, which represents a one per cent increase from the previous quarter.
Plans saw a net investment return of 0.9 per cent during the Q1 2025 period. Despite the drop and a projected decline of approximately five per cent of the median solvency ratio for the first week of April 2025, pension plans have healthy funding levels.
Pension plans are showing resiliency amid a decline in the solvency ratio during the past few months, said Andrew Fung, executive vice-president of pensions at the FSRA, in a press release.
“However, with this global trade war and ongoing economic uncertainty, it’s critical for plan administrators to proactively manage risk and regularly reassess their investment strategies to ensure long-term sustainability.”