DB Solvency Ratios Inch Up

But nearly all plans still face solvency deficiency: Aon Hewitt.

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inch upDecent 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.

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