The aggregate funding ratio for Canadian pension plans in the S&P/TSX Composite index increased to 102.1% on June 30 from 101.8% three months prior, according to Aon's Pension Risk Tracker.
The Pension Risk Tracker calculates the aggregate funding position on an accounting basis for companies in the S&P/TSX Composite Index with defined benefit plans, Aon explained in a Tuesday release.
The tracker also found that pension assets gained 1.2% over the second quarter of 2023, while the long-term Government of Canada bond yield increased 7 basis points during the quarter and credit spreads widened by 4 basis points.
These factors resulted in an increase in the interest rates used to value pension liabilities to 4.71% from 4.6% over the second quarter, a spokesman for Aon confirmed by email.
"The muted asset performance and the small increase in discount rates supported a small increase in funded status over the quarter amidst volatility," stated Nathan LaPierre, partner- wealth solutions at Aon, in the release. "Pension plans treaded water at healthy funded positions over the last quarter, giving plan sponsors time to consider derisking activities and shape better decisions."
The S&P/TSX Composite index is the headline index for the Canadian equity market and comprised 229 constituents as of June 30, according to S&P's website.