Defined benefit pension plans regulated by the Financial Services Commission of Ontario are continuing the trend towards improved solvency ratios.

The median solvency ratio rose to 93 per cent as of March 31, 2017, the regulator noted in its update on the first quarter of the year. That was up from 91 per cent on Dec. 31, 2016.

FSCO attributed the improved results to a solid investment performance during the first quarter. While stock markets have suffered in the last day, domestic equity returns reached 2.4 per cent in the first quarter, while bonds were up 1.2 per cent. World equities were particularly robust with returns of 5.8 per cent, according to FSCO. The regulator also attributed the improved solvency picture to an increase in commuted value interest rates that reduced pension liabilities.

Read: Eliminating solvency funding on the table as Ontario reviews DB rules

The last time solvency ratios reached 93 per cent was early 2014. The quarterly report showed just 22 per cent of plans had a solvency ratio above 100 per cent. Another 63 per cent of plans had ratios between 85 per cent and 100 per cent, FSCO reported.

Copyright © 2018 Transcontinental Media G.P. Originally published on

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