A large majority—87%—of open plans say they are likely to continue to offer a defined benefit plan in the next five to 10 years, according to survey results presented at the Park Hyatt in Toronto earlier today.
The survey, Exploring New Ground: Key Global Pension Strategies for Today’s Investment Landscape, finds that within this group, 74% of corporate plans indicated they will continue to offer DB plans, while 100% of public plans will offer these plans.
Contrary to many existing perceptions, the research shows that Canadian pension funds are well funded and solvent. The average funding ratio was 101%, with corporate plans reporting a 102% funding ratio and public plans reporting a 99% funding ratio.
The average solvency ratio was 99%, with corporate plans reporting a 98% solvency ratio and public plans reporting a solvency ratio of 99%.
While plans say they are on solid ground, they do have concerns. Both corporate and public plans(74% and 70%, respectively)list long-term costs and risk management as their top concerns with near-term market volatility ranking third on their list of concerns.
The survey was conducted by the Canadian Pension Fund Directory(a sister publication of Benefits Canada)for Pyramis Global Advisors.
There were 157 DB plans(96 corporate, 61 public)of all sizes representing more than $630 billion in assets that participated in the survey. Nearly 60% of plans surveyed have more than $1 billion in assets while 21 plans have more than $5 billion in assets.
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