The financial situation of Canadian pension funds was propped up by two sides last year, according to Mercer Investment Consulting.
“Not only was pension fund performance very strong, aided by good Canadian and very strong international equity market returns, but pension fund liabilities generally declined or grew by only a small margin due to higher long-term yields,” says Peter Muldowney, business leader for Mercer Investment Consulting in Canada. “
“This meant that most pension plans would have seen the gap between pension fund assets and liabilities reduced at the end of 2006 compared to the end of 2005.”
Its Pooled Fund Survey shows that the median return of a Canadian pooled balanced pension fund was 13%.
Mercer’s Canadian Pension Health index showed a solvency rate of 87% at the end of last year, up from the December 2005 solvency rate of 80%.
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