Canadian corporate pension plans have stayed the course over the past 10 years as the median funded status ticked up to 91.5% from 90% in 2009. The distribution across the 35-plus plans shows great dispersion, with more plans above the fully funded mark but others toward the more stressed end of the spectrum.
According to data collected by Pensions & Investments' Research Center, telecom company BCE Inc. was the largest plan by both assets and plan benefit obligation, with $23 billion and $23.4 billion, respectively, for an approximate funded status of about 98%.
The average discount rate fell 4.76% on average annually between 2009 and 2018, from 6.12% to 3.76%. Discount rates were as low as 3.52% in 2017.
Similar to their U.S. counterparts, pension fund allocations shifted toward fixed income from equity. The average fixed-income allocation at the end of 2018 was 50.9%, up from 40.9% in 2009; the average equity allocation fell to 35.8% from 52.4% over the period. Allocations to alternatives rose to an average 5.2% from 2.4%.