Canadian defined benefit plans administered by Aon Hewitt saw their funded status slip in the past three months, to a median 91.1% as of Sept. 26 from 96%.
However, the latest funded status is 3.1 percentage points higher than at the same time last year.
A survey of 275 public and corporate DB plans in Canada showed a reversal in the trend of rising funded status since June 2012.
Lower long-term interest rates in the past three months drove down the solvency of Canadian DB plans, according to a news release on the survey results issued Tuesday. Equity market returns and pension fund contributions weren’t enough to offset the decline.
About 23% of the surveyed plans were more than fully funded as of Sept. 26, vs. 37% three months earlier and 15% in the third quarter of 2013.
U.S. equities saw the highest return in the latest three-month period for pension funds surveyed, at 4.9%; followed by emerging markets equities at 2.5%; long-term bonds, 2.3%; global equities, 2.1%; and Canadian equities, -1.1%.