Staff
The median solvency ratio of Canadian defined benefit pension plans stood at 86.1 per cent at the end of April, an increase of 2.4 percentage points from the ratio at the end of March, according to Aon Hewitt.
Its survey, which tracks the performance of 449 pension plans, credits the bump with stronger equity market returns and rising bond yields.
Of the surveyed plans, 9.6 per cent were more than fully funded on April 29, up from 8.5 per cent on March 31.
The survey also found that pension asset returns recovered, especially Canadian equities (+3.7 per cent), offsetting weakness in currency adjusted returns in U.S. equities (-2.8 per cent), international equities (-0.4 per cent), emerging markets (-2.6 per cent), global real estate (-3.2 per cent) and infrastructure (-2.6 per cent).
It also showed that 10-year Canada bond yields rose in April by more than 25 basis points, having a major influence on the decrease in solvency liabilities and the corollary improvement in plan solvency funded status.