Majority of Ontario Pension plans continue to get stronger

FSRA’s latest solvency report attributes growth to strong investment gains

The Financial Services Regulatory Authority of Ontario (FSRA) released its Q1 2023 Solvency Report today and found that the health of most pension plans in the province continues to improve despite challenges with high inflation and global economic volatility. During the first quarter, pension fund investment returns averaged 4.3%, pushing the median solvency ratio to a new all-time high as at March 31, 2023.

“Most pension plans in Ontario continue to be well funded and this is good news for many pension plan members,” said Caroline Blouin, FSRA Executive Vice President, Pensions. “The funded status of a pension plan can change rapidly based on market conditions as we saw at the onset of the pandemic. With plans being well-funded, plan sponsors and administrators may find it an opportune time to pause and assess their asset allocation in light of their liability profile and risk management strategy.”

Key findings:

  • The median solvency ratio at the end of Q1 2023 was 115% – an all-time high. This was a 3% increase from 112% at the end of 2022.
  • The report projected 86% of pension plans to be fully funded on a solvency basis. This was a 5% increase from 81% last quarter.
  • 2% of plans had a solvency ratio below 85%, unchanged from last quarter.

Each quarter, FSRA monitors the solvency funding position, and publishes the estimated solvency ratios of Ontario Defined Benefit (DB) pension plans that are subject to solvency funding. This is one of the supervisory tools FSRA utilizes to improve outcomes for pension plan beneficiaries and to proactively engage in a dialogue with plan sponsors where there may be a concern over the security of pension benefits.

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FSRA continues to work on behalf of all stakeholders, including consumers and pension plan members, to ensure financial safety, fairness, and choice for everyone.

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For media inquiries:

Russ Courtney
Sr. Media Relations and Digital Officer
Financial Services Regulatory Authority
C: 437-225-8551
Email: [email protected]