July 2020

09Jul

US, Canadian Pension Funds Rebound with Markets in Q2

The funded status of the largest US corporate pension plans and Canadian defined benefit (DB) pension plans rebounded during the second quarter as resurgent equity and bond markets offset liability increases from falling interest rates. The funded status for the pension plans for 366 Fortune 1000 companies that sponsor US defined benefit pension plans increased to 82% as of June 30, from 79% at the end of the first quarter, but below the 87% at the end of 2019,...

July 9, 2020
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08Jul

Coronavirus Risks Manageable for Canadian Pension Funds

The 11 largest pension funds in Canada, which managed CAD1.7 trillion of net assets at year-end 2019, are expected to withstand market downturns within their respective ratings given their long-term investment horizons, ability to adjust contribution rates and the captive nature of inflows, Fitch Ratings says. However, near-term valuations and returns are expected to be pressured from the economic fallout of the coronavirus pandemic, given the breadth and global nature of its impact. Fund performance will depend on asset...

July 8, 2020
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07Jul

Canada. Department of Finance Announces Additional Relief Measures Amidst the COVID-19 Pandemic

The Department of Finance announced the release of proposed amendments to the Income Tax Regulations (Canada) that would assist registered pension plan (RPP) administrators and sponsors to manage and maintain their benefit obligations through the COVID-19 pandemic. The temporary relief measures that apply to RPPs are as follows: Extend the deadline to retroactively credit pensionable service: Pursuant to subsection 8308(4) of the Regulations, a member of a defined benefit provision of a pension plan may be permitted the option...

July 7, 2020
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June 2020
04Jun

Canada. Alberta public sector pension plan fund falls $3.4B in quarter, pointing to AIMCo losses

An Alberta public sector pension plan says its fund dropped by $3.4 billion — or 6.5 per cent — in the first quarter of the year, calling it an "extremely difficult" period for investors due to COVID-19's impact on financial markets. But the Local Authorities Pension Plan (LAPP), which has 275,000 members, is also pointing to losses at the Alberta Investment Management Corporation (AIMCo), its mandatory investment manager under provincial legislation. LAPP says total asset losses...

June 4, 2020
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May 2020
20May

Canada. How are pension plan sponsors’ fiduciary duties evolving in the time of coronavirus?

While the coronavirus pandemic certainly doesn’t change pension plan sponsors’ fundamental fiduciary duty to their plan members, the crisis is creating circumstances that will test how that responsibility manifests. Fiduciary duty arises when one party has a certain vulnerability in respect to another party, said Kenneth Burns, partner at Lawson Lundell LLP, in a webinar roundtable hosted by the Association of Canadian Pension Management on Thursday. In a pension context, plan sponsors have a fiduciary duty to their members...

May 20, 2020
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08May

Pandemic Blots One Year’s Worth of Gains from Canadian Plans

The coronavirus pandemic has wiped about a year’s worth of gains from Canadian pension plans, BNY Mellon said Monday. Corporate, public, and university retirement funds lost a median 7.23% in the first quarter ending in March, according to the financial services firm. Over the past 12 months, marked by strong advances up until 2020, that represented a 1.13% loss. But pensions overall still gained about 7.24% annually over the past decade. Results from the report were drawn from...

May 8, 2020
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01May

Canada. Pension plan regulatory relief and COVID-19 – additional measures announced

In our most recent posts, we highlighted some of the regulatory relief available to administrators of Ontario registered pension plans and plans registered in jurisdictions other than Ontario as a result of COVID-19. In this post, we highlight additional relief measures that have been announced for administrators and sponsors of registered pension plans, including the announcement of significant funding relief for sponsors of federally regulated defined benefit registered pension plans. Federal On April 15, 2020, the federal government announced...

May 1, 2020
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April 2020

17Apr

Canada’s Pension Funds Prepare for Post-Virus World

Ontario Municipal Employment Retirement System has put a team in place to analyze what the world will look like in the post-pandemic era. The C$109 billion ($77 billion) pension fund is weighing everything from what it’ll look like when people go back to work to how different companies in its portfolio will fare, Blake Hutcheson said in a Canadian Club of Toronto virtual roundtable. “Sadly, some of our companies won’t make it, it’s just a fact,” said Hutcheson, who...

April 17, 2020
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15Apr

Canada. The coronavirus has created a tremendous financial opportunity for workers with a pension

Unique opportunities sometimes come in extreme times. The one detailed below on commuting the value of your pension won’t be an option for many, but for those with the ability to take advantage, it could meaningfully improve their retirement finances for years to come. Read also Canada’s Pension Funds Prepare for Post-Virus World This opportunity is based on three fundamental facts First, the current or commuted value of your pension is much higher when interest rates on 5 Year Canadian Bonds are...

April 15, 2020
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02Apr

Financial market volatility brings Canadian pension health to lowest level in more than three years

With global equity markets and bond yields plummeting as the coronavirus spreads throughout the world, the solvency positions of Canadian defined benefit pension plans declined by more than 13 percentage points from Q4 2019, representing the lowest level of financial health since November 2016 , according to the first-quarter Median Solvency Ratio Survey by Aon plc (AON), the leading global professional services firm providing a broad range of risk, retirement, and health solutions. "March might have been the...

April 2, 2020
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