Canadian Investment Review

Solvency of Canadian Plans Continues to Climb

Written by Benefits Canada Staff on Thursday, May 4th, 2017 at 10:50 am

jump trampolineAon Hewitt is crediting strong equity equity markets with helping to keep solvency ratios for Canadian defined benefit pension plans in positive territory in April.

The median solvency ratio of about 500 plans surveyed by Aon Hewitt reached 97.1 per cent as of May 1. That was up slightly from 96.7 per cent on April 1.

Equity markets and a recovery in bond prices helped drive the results, Aon Hewitt noted. Returns from equity markets in April were solid, with emerging markets up 4.8 per cent, international up 5.1 per cent, global up four per cent and U.S. equities up 3.6 per cent. Canadian stocks lagged the other categories but they were still positive at 0.4 per cent.

The recovery in bond prices also helped put fixed-income returns in positive territory, Aon Hewitt noted. Alternative asset classes also showed growth, with global real estate returning 3.7 per cent in April and infrastructure up 4.3 per cent.

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