Staff
The median solvency ratio of defined benefit (DB) pension plans in Ontario was down very slightly in the fourth quarter of 2015, to 83% on December 31 compared to 84% on September 30, according to a quarterly update from the Financial Services Commission of Ontario (FSCO).
The update, which is aimed at providing stakeholders with more frequent information on the health of pension plans in Ontario, also found that 29% of plans had a solvency ratio between 85% and 100%, while just 8% of plans had a ratio greater than 100%.
Read: Canadian pension solvency declines in 2014
According to the update, the 1% decrease in the estimated median solvency ratio since September 30, 2015 was due to a number of factors, including:
- investment return on the model pension fund of 2.4% in the fourth quarter of 2015 caused the ratio to increase by 1%;
- the change in solvency liabilities due to changes in the Commuted Value Discount Rate and the Annuity Purchase Discount Rate was offset by the change in the mortality table, resulting in a 2% drop in the ratio.