Ontario’s defined benefit pension funds returned an average 2.9 per cent in the fourth quarter of 2022 while plan liabilities continued to benefit from a rising interest rate environment, according to the Financial Services Regulatory Authority of Ontario’s latest solvency report.
It also found the majority of plans remained fully funded on a solvency basis at Dec. 31, 2022. In fact, the median solvency ratio at the end of 2022 was 112 per cent, a three per cent increase from 109 per cent as at Sept. 30, 2022 and returning to the all-time high level it reached earlier in 2022.
In addition, the majority (81 per cent) of Ontario pension plans were projected to be fully funded on a solvency basis as at Dec. 31, 2022, while just two per cent fell below an 85 per cent solvency ratio at the end of the quarter.
“This past year has been difficult as the global economy experienced high inflation, rising interest rates and ongoing market volatility — however, the majority of Ontario pension plans remained in a well funded position in 2022,” said Caroline Blouin, the FSRA’s executive vice-president of pensions, in a press release. “With that being said, we encourage all plan sponsors and administrators to continuously monitor market conditions and manage the plan risks for the years ahead to maintain benefit security for plan members.”