July 6, 2018 09:45
Photo : Freepik
The solvency ratio of the median of the pension plans defined benefit plan is maintained above the bar to 100 % in the second quarter, according to the analyses of Mercer and Aon. The first firm reports a median ratio of 107 % at June 29, while that of the second was of 100.2 % at the same date.
Mercer states that the nearly half of the plans of canadian defined benefit pension are fully funded, while at Aon, this rate rises to 50.8 %. For the latter, it is an increase compared to the previous quarter, while 45.8% of pension plans were fully funded.
International tensions to monitor
In spite of increased volatility of 50 % in 2018, Aon said that pension plans defined benefit plans ” are very well-behaved in a period marked by headlines, disturbing, and international tensions increasing “.
“It would not take much for any gains in the solvency of this year are disappearing, and quickly. Obviously, plan sponsors should now think about the steps to implement or update their risk management strategies “, underlines Claude Lockhead, partner and executive director of the convenient Retirement of the eastern region at Aon.
The force of the markets is beneficial
At Mercer, we note that the solvency of the pension plan has benefited from strong markets. “Despite the persistence of interest rates particularly low, the funded status of canadian pension plans is a very good figure. By contrast, the financial markets remain volatile due to geopolitical uncertainty, not knowing in particular if the slip current to the protectionism will accelerate or slow down, ” confirms F. Hubert Tremblay, senior adviser of the domain Holdings at Mercer.