Aon, a leading global professional services firm, has announced that the aggregate funded ratio for Canadian pension plans in the S&P/TSX Composite Index increased from 89.4% to 97.2% during the past 12 months, according to the Aon Pension Risk Tracker.
The Aon Pension Risk Tracker calculates the aggregate funded position on an accounting basis for the companies in the S&P/TSX Composite Index with defined benefit (DB) plans. The tool uses Aon’s Risk Analyser platform, which allows plan sponsors to track their individual plan’s funded status on a daily basis. Versions of the Pension Risk Tracker are also available for the S&P 500 in the US and several indices in the UK.
“2021 was a spectacular year for Canadian pension plans funding, with both interest rates and risk-seeking assets going up,” said Erwan Pirou, Canada Chief Investment Officer, Wealth Solutions, Aon. “But with inflation reaching record highs in North America, they will be watching closely if central banks deliver on the expected rate hikes in the next few months and how meaningful they will be. Longer-term, ensuring the sustainability of plan assets to climate change is becoming a more pressing issue as well.”