Canadian Pension Funding Improved During Downturn
January 20, 2010 (PLANSPONSOR.com) – Despite wild fluctuations in the world markets during the economic downturn, the aggregate funded ratio of defined benefit plans sponsored by Canadian public companies actually improved slightly.
In a news release with the latest data from its Pension Risk Tracker, Hewitt Associates said the pensions at Canadian public firms ended 2009 with an aggregate funded ratio of 98% (with assets up 18% and liabilities up 17%), up from 97% a year earlier. However, in between the year-end measurements, Hewitt said the funded ratio figure saw significant volatility, with a low of 89% in July and a high of 112% at the end of May.
Comparable figures for the U.S. saw the aggregate funded ratio figure up 11% to 87% between 2008 and 2009, while the same figure for the U.K. dropped 16% to 78%.
“With the transition to international accounting standards in 2011, organizations need to ensure they are ready for increased balance sheet volatility due to their pension plans,” said Rob Vandersanden, a principal in Hewitt’s Calgary office, in the news release. “Proactive employers are taking appropriate steps now to manage the risks that will contribute to that volatility.”
The Pension Risk Tracker features daily updates to the aggregate funded ratio of defined benefit pension plans of companies in the S&P/TSX, S&P 500, FTSE and DJ Euro Stoxx 50. More information is at https://rfmtools.hewitt.com/PensionRiskTracker/.