Helped by a 14-basis-point increase in the average discount rate, the defined benefit plans of Canada’s big six banks are now fully funded on average and on aggregate. The average discount rate on Oct. 31 was 4.39%. Discount rates hit a multiyear low of 4.25% in fiscal 2014. Five years ago, the average discount rate was 5.74%.
The six companies had an aggregate of C$43.4 billion ($33.2 billion) in assets and C$43.2 billion in liabilities. The average asset allocation of the banks was 46% listed equity, 44% fixed income, 6% alternatives and 4% other and cash.