Reports from Mercer and Aon reveal mixed asset performance in Q1
Canada’s defined benefit pension plans have faced some challenging conditions in the first quarter of 2025, but remain resilient, according to two reports this week.
The Mercer Pension Health Pulse shows that the DB plans in its database saw their median solvency ratio decline to 122% as of March 31 compared to 125% at the end of December, with plans facing increased liabilities and mixed asset performance.
The share of plans that had a solvency ratio above 120% slipped back to 53% from 55% in the previous quarter, the number of plans in Mercer’s database with a solvency ratio between 110% and 120% increased to 22% from 20% and the number of plans with a solvency ratio above 100% was generally stable at 88%.
Tariffs have created uncertainty for the Canadian economy along with continued concerns around inflation and plans have required deft management of portfolios to navigate some choppy waters.
“The overall financial health of Canadian DB pension plans remains strong, despite a slight decline during the quarter,” Jared Mickall, a Mercer principal and wealth practice leader in Winnipeg, says they have “From a solvency perspective, DB pension plans for Canadian workers continue to be generally secure.”
Meanwhile, The Aon Pension Risk Tracker shows that pension assets lost 0.5% over the first quarter of 2025 while the aggregate funded ratio for Canadian pension plans in the S&P/TSX Composite Index decreased to 105.5% compared to 107.5% at the end of 2024.
“Due to uncertainty, and in some cases, the imposition of tariffs in the first quarter of 2025, markets were quite volatile,” said Nathan LaPierre, partner for Wealth Solutions in Canada at Aon, “Pension plans faced significant headwinds during the quarter, but starting from strong funded positions at the beginning of the quarter.”
