Solvency status of Defined Benefits Plans improve in Q1

FSRA has released its Q1 2021 Quarterly Estimated Solvency Report for Ontario’s Defined Benefit Pension Plans. The solvency report helps FSRA indicate the health of these pension plans and is one of the supervisory tools FSRA uses to improve outcomes for pension plan beneficiaries.

The report finds that pension plans are at their best funded positions since the 2008 global financial crisis. More than half of plans have a solvency funded ratio exceeding 100%.

The median projected solvency ratio increased to 103% at March 31, 2021, compared to 85% at March 30, 2020 when the COVID pandemic started.

This marks only the second time Ontario’s median solvency ratio has exceeded 100% since the 2008 global financial crisis. The previous time this happened was as at September 30, 2018.

The percentage of pension plans that were projected to be fully funded on a solvency basis at March 31, 2021 was 60%, while 4% were projected to end the year with a solvency ratio below 85%.

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