Canadian defined benefit plans posted positive investment returns in the third quarter, the second straight quarter of gains, Northern Trust pension universe data found.
For the quarter ended Sept. 30, the median plan in the Northern Trust Canada Universe returned 3.2%, down from 9.9% in the second quarter, according to the findings released Tuesday.
The median plan had posted a 7.1% loss in the first quarter, primarily due to market losses resulting from the economic impact of the COVID-19 pandemic.
The third quarter saw equity markets shifting focus "to the power of government-funded stimulus," with positive returns throughout the global financial markets driven by the convergence of expansive fiscal policy along with accommodative monetary policy, according to a news release announcing the data.
"The global pandemic has undoubtedly accelerated the pace of change for many defined benefit pension plans over the course of recent months; namely in the form of financial, regulatory as well as technology transformation," said Katie Pries, president and CEO of Northern Trust Canada, in a news release. "As pension plan sponsors embrace this evolution of change and the adaptation to a virtual work environment, they remain vigilant on preserving plan assets while generating investment results supportive of long-term sustainability and growth."
Canadian equities and U.S. equities returned 4.7% and 6.8%, respectively, in the quarter ended Sept. 30, as measured by the S&P/TSX and S&P 500 indexes, respectively.
