Solvency ratios for defined benefit pension plans regulated by the Financial Services Commission of Ontario have stayed relatively stable, according to the organization’s quarterly report.

The median solvency ratio was 91 per cent as of Sept. 30, 2017, up from 89 per cent on June 30 and down from 93 per cent on March 31. According to FSCO, the slight increase is due mostly to a rise in commuted-value interest rates.

Read: Ontario DB solvency ratios hit three-year high

The report also found that 58.3 per cent of these defined benefit plans had solvency ratios between 85 and 100 per cent, and 18.2 per cent had a solvency ratio in excess of 100 per cent.

The median net after-expense return was just 0.4 per cent in the quarter, which FSCO deemed a “slight source of solvency loss over the quarter.”

Meanwhile, Ontario’s new solvency funding relief took effect on July 1, 2017, which allows for a deferral of up to two years of the start of the period for which any new solvency deficiency must be amortized, in effect allowing plan sponsors to halt funding for new deficiencies until the province’s new funding framework is officially enacted.

Read: Ontario announces long-awaited DB solvency reforms

Copyright © 2020 Transcontinental Media G.P. Originally published on

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