Stock market rally after December plunge helps pension plans in Q1: reports

TORONTO — The financial strength of Canada’s defined benefit pension plans apparently improved over the first quarter of 2019, recovering some of the ground they lost when stock markets took a dive last December.

Two of Canada’s largest pension advisory firms say conditions for Canadian defined benefit pensions improved because of a rally on domestic and foreign stock markets during the early months of this year.  

The Aon Median Solvency Ratio rose to 98.5 per cent as of March 31, from 95.3 per cent as of Jan. 1.

Similarly, the Mercer Pension Health Index rose to 106 per cent at March 31, from 102 per cent earlier this year.

The two firms use different methods for estimating the overall strength of Canada’s defined benefit plans.

That type of pension can sometimes put significant financial stress on employers, since they are legally obligated to provide an agreed-upon level of benefits for retirees even when investment markets do poorly.

The Canadian Press