Seventy-one percent of Canadian defined benefit plans surveyed by benefits consultant Morneau Shepell said they've taken steps to derisk their plans since 2008.
Also, 53% of the 62 surveyed plans said they will consider further derisking measures.
“It is very significant that more than half the plan sponsors are considering further derisking measures, given that nearly three-quarters of them have already taken steps to derisk,” said Fred Vettese, chief actuary at Morneau Shepell, in the news release. “About 40% of the private-sector defined benefit plans in our pension database are already closed to new members, and this percentage will almost surely continue to rise.”
Methods of derisking mentioned by respondents included reducing the equity weighting in their target asset mix, cutting back on early retirement subsidies and automatic inflation protection, basing pension benefits on career average earnings, requiring employees to contribute more or converting to a defined contribution plan.
Thirty-six of the respondents were from corporate DB plans and 26 were from public plans, said Cathren Ronberg, Morneau Shepell spokeswoman. The percentage of public-sector plan sponsors that were considering derisking was virtually the same as for private-sector sponsors.
The online survey was conducted earlier this month.
