In its This autumn 2022 Solvency Report, the FSRA reveals that pension fund funding returns for the quarter have been just below 3% whereas pension plan liabilities continued to learn from a rising rate of interest surroundings.
On the finish of 2022, 81% of plans have been projected to be absolutely funded on a solvency foundation with a return to an all-time-high median projected solvency ratio of 112% as at December 31, 2022, after rising 3% from the top of September.
The share of plans that fell under an 85% solvency ratio was 2%, down 1% from the earlier quarter.
Excellent news however stay vigilant
Whereas the place of Ontario pension plans was usually constructive on the finish of final 12 months, the regulator is reminding plan sponsors and directors to stay vigilant to potential headwinds.
“This previous 12 months has been tough as the worldwide financial system skilled excessive inflation, rising rates of interest and ongoing market volatility, nonetheless the vast majority of Ontario pension plans remained in a well-funded place in 2022,” mentioned Caroline Blouin, FSRA Govt Vice President, Pensions. “With that being mentioned, we encourage all plan sponsors and directors to repeatedly monitor market circumstances and handle the plan dangers for the years forward to keep up profit safety for plan members.”