Canadian pension plans post strong gains as FSRA reports Ontario's solvency ratio at 122%
Ontario’s defined benefit (DB) pension plans concluded 2024 with a median solvency ratio of 122 percent, marking a one percentage point increase from the previous quarter.
This level represents the highest since the Financial Services Regulatory Authority of Ontario (FSRA) began monitoring in 2009
"It has been a remarkable year for pension plans as they closed the year with robust funding positions from strong market gains and steady interest rates," stated Andrew Fung, FSRA executive vice-president, Pensions
FSRA advises pension plans to reassess investment strategies and employ tools such as stress tests and modelling to ensure financial resilience.
According to Benefits and Pensions Monitor, Canadian defined benefit pension plans improved nationally. Mercer’s Pension Health Pulse reported a median solvency ratio of 125 percent at the end of 2024. That’s up from 122 percent in Q3 and 116 percent a year earlier.
The firm noted that 88 percent of plans in its database had solvency ratios above 100 percent .
Similarly, Normandin Beaudry’s Pension Plan Financial Position Index indicated an average funded ratio of 129 percent on a going concern basis as of December 31, 2024, a 12 percent year-over-year increase, as per HR News Canada.
These gains were attributed to strong investment returns and stable costs.
FSRA continues to release quarterly solvency reports to assess the financial health of Ontario's DB pension plans and provide timely information to plan members about their plan's performance and the broader economic context.
