The new Mercer Pension Health Index, which is in line with other reports released earlier this week, stood at 80% September 30, up from 77% on June 30.
Solvency funding for DB pension plans is up slightly, mainly due to strong equity returns in the third quarter, according to a new survey from Aon Hewitt.
Most Canadian DB pension plans have significant solvency deficits. Unless we experience a turnaround in financial market conditions over the next few years (i.e., equities perform well and/or long-term interest rates rise significantly), many DB plan sponsors will need to make large contributions—and for several years—to fund these solvency deficits.
Ontario has extended the solvency funding exemption for specified Ontario multi-employer pension plans (SOMEPPs) to 2017. The exemptions were previously set to expire in September of this year.
It’s more bad news for Canadian pension plans. Yesterday, Mercer and Towers Watson both released their figures regarding DB plan funding in the second quarter of 2012—and both were looking pretty gloomy.
Contribution requirements for many DB pension plans are being driven by the plans’ solvency position. The financial crisis of 2008 and early 2009, along with a deterioration in financial market conditions during 2011, left many plans with large solvency deficits.
The Quebec government’s new regulation regarding temporary solvency relief measures for DB pension plans comes into effect today.
The pension plight of a family friend has put me in a somewhat ugly mood. This man, Bill (not his real name), went to university with my father, and I have known him and his family all of my life. Over dinner at my parents’ a few weeks ago, Dad told me that the company Bill worked for until his retirement—now called Catalyst Paper—is in financial difficulty and Bill is worried about his pension. Dad thought maybe I could help.
In 2011, the Ontario government announced measures offering temporary solvency relief for eligible public sector pension plans that are less than 90% funded. A number of Ontario universities have already signed on for relief, and other plans—both public and private—can learn from their experience in the fight for sustainability.
The Nova Scotia government has announced it’s making a change to provincial pension regulations in order to help flailing Dalhousie University.