Model Pension Plan Rises to Fully Funded in Q4

Rising Interest Rates and Asset Gains Provide a Big Boost

In today’s uncertain market environment, sponsors of Canadian multi-employer pension plans need to remain vigilant about the risks their plans face — from changes in the benchmark discount rate to fluctuations in their industry’s employment levels.

Stay up to speed on these evolving conditions with Direction, a quarterly overview of recent changes in:

  • A model plan’s assets, liabilities and funded ratio,
  • The benchmark discount rate for determining pension liabilities, and
  • Total hours worked in select industries.

The model plan ended the year 101 percent funded, after rising interest rates and accelerated equity-market gains drove its funded ratio up 8 percentage points in the fourth quarter. The increase is good news for plan sponsors, but also highlights the ongoing need to manage the inherent volatility in capital markets and how it may affect their plan’s funded status over time.

Segal Group professionals can help you to:

  • Project your plan’s funded ratio through asset-liability modeling, and
  • Develop funding strategies that achieve your desired funding targets.

To learn more about how we can help trustees manage their plan, contact your Segal consultant, Cameron McNeill or Geneviève Lussier.

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