DB pension plans demonstrate resilience with positive asset returns: report
August 16, 2023
Canadian defined benefit (DB) pension plans have demonstrated resilience and positive asset returns, according to new report from Wealth Professional.
The report cites a release from Mercer on the trends from Mercer Pension Health Pulse showing that positive asset returns elevated DB plans in 2023’s second quarter; they were up 3% by June 30, 2023 — from 116% to 119%.
The report also notes that Aon’s Pension Risk Tracker revealed the aggregate funded ratio for Canadian pension plans in the S&P/TSX Composite Index grew from 101.8% to 102.1% in 2023’s second quarter.
While this is positive overall, Wealth Professional indicates there could be risks in the second half of the year, with potential interest rate hikes and inflation. Mercer’s report suggests plans should aim to be risk-averse to brave the waves of economic forces.
Find all three sources linked below:
Mercer: https://www.mercer.com/en-ca/about/newsroom/mercer-pension-health-pulse-q2-2023/
Aon’s Pension Risk Tracker: https://www.aon.com/human-capital-consulting/retirement/investment-consulting/core-services/pension-risk-management/pension-risk-tracker.jsp
Wealth Professional: https://www.wealthprofessional.ca/news/industry-news/canadas-db-pension-plans-resilient-but-must-prep-for-headwinds/377556
