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Value of company pension plans dropped by about 11% last year, says Morneau Shepell

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Pension/Retirement / Canada

Value of company pension plans dropped by about 11% last year, says Morneau Shepell


Better results possible with Risk Management Portfolio

TORONTO, Jan. 26, 2012 /CNW/ - Morneau Shepell Ltd. says the typical pension plan dropped in value by about 11% last year, but that a more strategic approach could have prevented this negative impact.

"As of December 31, 2011, a typical pension plan with a traditional portfolio saw its financial position deteriorate by about 11%, but our Risk Management Portfolio kept pace with liabilities," says Patrick De Roy, Partner and National Leader of the Risk Management Practice for Morneau Shepell. "It actually shows growth of 12% last year."

Morneau Shepell's Risk Management Portfolio is designed to reduce fluctuations in a plan's financial position. While a traditional pension plan portfolio heavily invests in equities, the Risk Management Portfolio is based on an investment policy with a more diversified asset mix and a similar, expected long-term return. The objective is to reduce risk by better matching liabilities, and by investing in alternative strategies that are less correlated with equity markets.

"In 2011, corporate bond yields decreased, resulting in greater liabilities," says Jean Bergeron, Partner and Practice Leader for Morneau Shepell's Investment Consulting Practice. "A traditional pension plan portfolio, which has a large mismatch between plan assets and liabilities, did not grow enough to compensate for this increase."

Morneau Shepell

Morneau Shepell is the largest Canadian-based firm offering industry-leading benefits and pension consulting, outsourcing, as well as health and productivity solutions. The company works with clients to develop innovative solutions that integrate with their business strategies to achieve results. Through Benefits and Health Solutions Consulting, Pension Consulting, Health Management, Administration Solutions and Shepell•fgi's Employee Assistance Program, Morneau Shepell helps clients reduce costs, increase employee productivity, and improve their competitive positions by supporting their employees' financial security, health and well-being.

Established in 1962, Morneau Shepell has grown to serve over 8,000 clients, ranging from small businesses to some of the largest corporations and associations in North America. With approximately 2,500 employees in offices across North America, we provide services to organizations across Canada, in the United States and around the globe.

Morneau Shepell Inc. is a publicly traded company on the Toronto Stock Exchange (TSX). For more information, visit

Image with caption: "Morneau Shepell Risk Management Portfolio Performance Chart as of December 31, 2011 (CNW Group/Morneau Shepell Ltd.)". Image available at:

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Jerry Amernic