The funded status of Canadian pension plans ended the third quarter around 85%, but two reports said they ended up there from different starting points.
According to Mercer, the median funding ratio for its Canadian plan clients was 85% as of Wednesday, up 3 percentage points from June 30 and the same as the start of 2016.
Also, the Mercer Pension Health index — which tracks the typical Canadian DB plan based on 100% funding as of Jan. 1, 1999 — was 92% as of Wednesday, up from 90% as of June 30 and even with Jan. 1.
In a separate report, Aon Hewitt said Canadian plans it administers had a median funding ratio of 84.6% as of Thursday, down from 85.4% on June 30 and 87.6% on Jan. 1.
Twelve percent of Aon Hewitt-administered plans were fully funded as of Thursday, vs. 9.1% as of June 30.
A typical balanced pension fund portfolio would have returned 4.1% during the third quarter through Sept. 28, Mercer said in a news release. U.S. equities returned 6.29%; EAFE markets, 12.5%; international equities, 8.5%; and Canadian equities, 5.4%. Long-term Canada bond yields were 1.7%.
“With the immediate impact of Brexit muted and relative stability in monetary policy, the summer proved to be relatively calm for pension plans,” said Ian Struthers, partner and investment consulting practice director at Aon Hewitt, said in a separate news release. “However, when we look more closely at the quarter, we see that there has been volatility on both the asset and liability sides of the ledger.”
