The defined benefit (DB) pension plans that make up Mercer’s pension database boosted their solvency ratio in the second quarter to 126%. That’s up four points relative to the beginning of Q2, according to the consulting firm.
The Mercer Pension Health Pulse reports the median ratio of solvency assets to liabilities (i.e., mid-point) among 471 pension plans served by Mercer. It tracks the plans’ ability to meet their obligations to members in the event they were wound up.
“From a solvency perspective, the overall financial health of DB pension plans for Canadian workers continues to be generally secure,” said Jared Mickall, a Mercer principal and wealth practice leader in Winnipeg.
The median solvency rate dipped to 121% at the end of April amid heated trade rhetoric coming out of Washington, and then recovered in May and June.
“Equities experienced significant volatility throughout the quarter but ended on a positive note,” Mickall said. “Meanwhile, overall increases in fixed income yields resulted in an overall decline in liabilities and a general decline in fixed income assets.”
In related news, Aon plc released new numbers from its Aon Pension Risk Tracker. It reports the funded position on an accounting basis for DB plan sponsors on the S&P/TSX composite index. That group’s aggregate funded ratio rose from 105.5% at the end of the first quarter to 109% at the end of Q2.
This post has been updated to include the Aon results.