Defined Benefit pension plans in Ontario remain financially strong
Defined benefit pension plans in Ontario remain financially strong which is positive news for plan members and their families.
In its Q2 2023 Solvency Report, FSRA found that the overall funded position of pension plans improved over the quarter with the median solvency ratio reaching another new all-time high. In its 2022 Defined Benefit Funding Report, FSRA found the funded position of pension plans improved over the year, with those being fully funded increasing by seven percent.
To maintain this stability in the pension sector, FSRA encourages plan sponsors and administrators to continue monitoring plan risks and ensure member rights and benefits are protected.
- Q2 2023 Solvency Report (quarterly): The funded position of most plans improved in the second quarter. Although the gains were modest compared to the previous two quarters, the median solvency ratio at the end of Q2 was 116% – another new all-time high. In addition, pension plans eked out positive investment returns averaging out to 0.7%.
- 2022 DB Funding Report (annual): As compared to the 2021 report, the funded position of plans improved in 2022. Of note is that 83% of plans were fully funded last year, up from 76% in 2021.
FSRA encourages plan administrators to develop a framework and strategy to assess and mitigate risks. This will help manage potential issues and achieve the desired outcomes. They must ensure their plan continues to deliver promised benefits in challenging situations, e.g., when funding costs increase.
FSRA continues to work on behalf of all stakeholders, including consumers and pension plan members, to ensure financial safety, fairness, and choice for everyone.
Learn more at www.fsrao.ca.
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Sr. Media Relations and Digital Officer
Financial Services Regulatory Authority
Email: [email protected]