DB Solvency Ratios Inch Up
But nearly all plans still face solvency deficiency: Aon Hewitt.
BY Caroline Cakebread | October 2, 2012
Decent equity market returns pushed up solvency funded ratios for Canadian DB plans in the third quarter of 2012. According to Aon Hewitt, the median solvency funded ratio of a large sample of pension plans edged up slightly from 66% at the end of June 2012 to 68% at the end of September 2012. This reflects gains in the Canadian stock exchange (7.0%), U.S. equities (2.7%), and international equities (3.3%).
“Even with this improvement, it still leaves the typical plan in the same position as it was at the start of 2012 – despite the significant cash contributions that have typically been made” said Thomas Ault, an Associate Partner in Aon Hewitt’s retirement practice.
About 97% of pension plans in this sample had a solvency deficiency as at September 30.