The 25 largest Canadian corporate pension plans were 97% funded in aggregate at the end of 2013, up from 86% in 2012, according to a report from Russell Investments.
The pension funds, all with pension obligations of more than C$2 billion (US$1.84 billion), had combined assets of C$142 billion and liabilities of C$147 billion as of Dec. 31. That compares to assets of C$131 billion and liabilities of C$152 billion at the end of 2012.
The corporate pension funds saw their combined deficit decline to C$5 billion as of Dec. 31, from C$21 billion 12 months earlier — a 76% change.
Investment returns were the driver of asset gains in 2013, with liabilities cut by rising interest rates. A total of C$17 billion was added to the pension funds through investment gains, with an additional C$5 billion coming from contributions. Meanwhile, the median discount rate rose to 4.7% from 4.4%, trimming liabilities by C$5 billion.
The 25 pension funds, which Russell dubbed “The C$2 Billion Club,” have a combined 50% of all Canadian corporate pension liabilities.
The full report is on Russell's website.