The funded position of a typical Canadian defined benefit pension plan increased slightly both on a solvency and accounting basis in April, according to Telus Health’s latest pension index.

It found the average funded position increased slightly on a solvency basis from 97.7 per cent to 98.2 per cent at the end of the month. On an accounting basis, it rose to 99.5 per cent.

Read: Average Canadian DB pension plan’s funded position decreases in March: report

A representative pension plan portfolio returned negative 1.7 per cent, facing headwinds in both equities and bonds from persistent market volatility. The MSCI ACWI returned negative 3.1 per cent, while the S&P/TSX composite index returned negative 0.1 per cent.

Short- and long-term government bond yields were both positives to pension plans during April with an increase of approximately 0.19 per cent only for long-term bonds. Market expectations for long-term inflation declined slightly to 1.82 per cent since the end of March.

In a press release, Gavin Benjamin, partner in Telus Health’s consulting team, said the relatively small funded ratio changes fail to convey how volatile the plan’s funded ratio has been in 2025.

“Volatile periods such as the one we are experiencing serve as a reminder of how important it is for plan sponsors to utilize tools that can quantify pension plan financial risk.”

Read: Solvency ratio of average pension fund drops 2.3% in Q1 2025: report

A separate report by Milliman Inc. found the funded ratio of the 100 largest U.S. corporate pension plans increased to 104.9 per cent in May, up from 103 per cent at the end of April and 103.6 per cent at the start of the year.

Plans saw a 0.68 per cent investment return, which added $2 billion to the market value of plan assets. Discount rates hit a 20-month high, increasing another 14 basis points in May to 5.71 per cent. It shaved $19 billion off plan liabilities in the Milliman 100 pension funding index.

A positive projection from the report shows a 10.53 per cent annual return could boost the funded ratio of plans to 112 per cent by the end of 2025. However, a pessimistic forecast could see funded ratios declining to 100 per cent with 4.76 per cent annual returns this year.

“The large jump in discount rates was the primary reason the funded ratio rose for the second straight month in May,” said Zorast Wadia, author of the report, in a press release. “While this helped to offset the first-quarter funding slump, discount rates may not remain elevated indefinitely, underscoring the value of an asset-liability matching strategy for corporate pensions.”

Read: Estimated funded status of 100 largest U.S. DB pension plans increased to 102.9% in April: report