Ontario’s defined benefit pension plans reached a median pension solvency ratio of 124 per cent for the fourth quarter of 2025, according to a new report by the Financial Services Regulatory Authority of Ontario.
It noted the result was unchanged from the record high achieved in the previous quarter and represented an uptick from the 122 per cent recorded during the same period last year.
Read: Ontario DB plans’ average solvency ratio increases to 124% in Q3 2025: FSRA
The percentage of pension plans that were projected to be fully funded on a solvency basis as at Dec. 31 was 91 per cent, compared to 92 per cent as at Oct. 31. Only two per cent of plans had a solvency ratio below 85 per cent, the same percentage since last quarter.
Investment returns for the quarter averaged 0.6 per cent, said the report, noting the Canadian dollar strengthened but the Bank of Canada revised downward its projected gross domestic product growth for 2025. The Canadian yield curve shifted up slightly and steepened with two-year and 10-year benchmark government bond yields ending the quarter at 2.58 per cent and 3.42 per cent, respectively.
While the results are positive, pension organizations should remain vigilant of potential risks in 2026 like interest rate movements, equity market corrections and the ongoing geopolitical and economic uncertainty, said Andrew Fung, executive vice-president of pensions at FSRA, in a press release.
“After a volatile first half of 2025, the year finished on a strong note, driven largely by positive equity market performance and the continued resilience of Ontario’s pension plans during the second half.”
Read: FSRA finds Ontario DB plans’ average solvency ratio increasing to 122% in Q2 2025