As equities remain stable and bond markets uncertain, the median solvency ratio for Canadian defined benefit pensions moved very slightly, from 85.3 per cent on Aug. 1 to 85.5 per cent on Aug. 31, according to Aon Hewitt’s latest pension plan solvency survey.
Read: Stable growth in equities pushes defined benefit pension solvency up: survey
The survey also found pension asset returns were 0.6 per cent at the end of the month. Plans saw gains in U.S. (0.8 per cent), domestic (0.3 per cent), international (0.7 per cent) and emerging market (3.1 per cent) stocks, while returns saw losses in global real estate (two per cent) and infrastructure (2.5 per cent).
Of the 449 plans surveyed, 10.7 per cent were more than fully funded by Aug. 31, which remained unchanged from the end of July.
Solvency annuity purchase rates dropped by 13 basis points to 2.6 per cent as long-term bonds continue to yield low returns. The survey also noted lower transfer value rates increase plans’ solvency liabilities.
Read: Canadian pension solvency survives Brexit, for now: survey