Canadian defined benefit plans posted positive investment returns in the fourth quarter and for the year thanks to strong equity markets, data from Northern Trust show.
The median Canadian plan posted a 5% return for the fourth quarter of 2020, according to the Northern Trust Canada Universe, up from the median return of 3.2% reported in the third quarter.
Despite volatility caused by the COVID-19 outbreak, the median Canadian plan returned 10% for the full year ended Dec. 31.
"The global pandemic undoubtedly was the focal point over the last year, but 2020 also symbolized a period of leadership, adaptation and resiliency," said Northern Trust Canada President and CEO Katie Pries in a news release announcing the results. "Monetary and fiscal leaders were challenged with seeking unprecedented solutions for economic and financial relief."
Ms. Pries added: "Many Canadians were confronted with pivoting from a traditional work setting to a virtual work from home environment. Canadian pension plan sponsors faced the difficult task of navigating through an extraordinary and unpredictable period in history, while safeguarding plan assets for future retirement. This test of resiliency was met with solid performance."
Canadian equities and U.S. equities returned 9% and 7%, respectively, in the quarter ended Dec. 31, as measured by their respective S&P/TSX and S&P 500 indexes. For the full year, Canadian equities returned 5.6%, while U.S. equities posted a full-year return of 16.3%.