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Keep working: Your defined-benefit pension plan is worth less after the end-of-year stock plunge

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Funds lost in the fourth quarter thanks to a combination of weak stock markets and low long-term interest rates.Atomazul – Fotolia file photo

TORONTO — Two of Canada’s largest pension advisory firms say the financial health of defined benefit plans was eroded in the fourth quarter by a combination of weak stock markets and low long-term interest rates.

Mercer Canada and Aon each concluded in separate reports Thursday that fewer than half of the country’s defined benefit pension plans were fully funded at the turn of the new year.

Mercer Canada estimated that less than 30 per cent of Canadian defined pension plans were fully funded at the end of 2018, while Aon estimated 38.5 per cent of plans were fully funded as of Jan 1.

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