Morneau Shepell Pension Indices November 30, 2020
The Morneau Shepell Pension Indices, released monthly, condense the journey that pension plans have experienced over the last year into a few key statistics. More importantly, they also provide an early indicator of the challenges that are yet to come for plan sponsors and administrators to help with the monitoring and management of their pension plans.
- The Morneau Shepell Pension Indices for November 30, 2020, show that pension plans have, in general, been very successful at weathering the storm of volatile markets and uncertain economic conditions in 2020.
- Despite this, the pension indices highlight that 2021 may be a challenging year, with the pension expense in financial statements expected to increase by around 12% compared to 2020.
- New rules by the Canadian Institute of Actuaries lead to a 6% reduction in commuted values to be paid from pension plans as at December 1, 2020.
- The New Year will likely bring further volatility, continued low interest rates and further pressure on accounting measures and cash requirements. A proactive approach to risk management is a must for pension plans given that the only certainty for 2021 is that we will see further uncertainty.