The solvency position of Canadian pension plans were down slightly in 2015, according to the latest Mercer Pension Health Index.

The median solvency ratio of the pension plans of Mercer’s clients stood at 85% on December 31, 2015, down from 88% at the beginning of the year, with around nine out of 10 plans still being in solvency deficit position.

According to Mercer, the decline in funded status was due to poor equity market performance, the continued decline in long-term bond yields and new mortality tables that reflect increased life expectancy, partially offset by the positive impact of the decline in the Canadian dollar on foreign asset returns.

“There was considerable variability in the financial performance of pension plans in 2015,” said Manuel Monteiro, leader of Mercer’s Financial Strategy Group. “Pension plans with significant Canadian equity holdings and those that hedge their foreign currency exposure experienced larger than average declines in their solvency ratio.”

Recognizing the challenging economic conditions, some provincial governments are moving towards lessening the funding burdens for defined benefit pension plan sponsors. Quebec has made the most significant changes by moving away from a solvency-based funding target starting on January 1, 2016.

Read: New pension funding rules in Quebec

Alberta and British Columbia have also introduced helpful changes in the past few years. Most recently, the Ontario government announced that it will develop a set of reforms that would “focus on plan sustainability, affordability and benefit security while balancing the interests of pension stakeholders.”

From an investment perspective, Canadian equities were the poorest performing broad equity asset class in 2015, with a return of -8.3%, according to Brian Dayes, partner at Mercer Investments.

“Two factors that particularly affected the Canadian economy were falling commodity prices and a continued ramp up in oil production, to a near all-time high, bringing the price per barrel down to around US$37,” he added.

US equities fared a bit better, but far from stellar, returning 1.4% in USD; a Canadian investor would have done well though, at close to 22% for the year, in CAD terms, given the fall of the Canadian dollar. International equities also performed better than Canadian equities with the MSCI EAFE returning 5.8% in local currency terms.