Pension Indices: April 2022
The Pension Indices by LifeWorks, released monthly, condense the journey that pension plans have experienced during the year into a few key statistics. More importantly, they also provide an early indicator of the challenges and opportunities that are yet to come for plan sponsors and administrators to help with the monitoring and management of their pension plans.
- Over the month of April, the funded position of a typical pension plan slightly improved on both a solvency and accounting basis.
- The investment return was -5.3% for the month for a representative pension plan portfolio. The Canadian equity index finished the month with a weak return of -5.0%. Also, returns for Canadian bond indices were negative as yields increased significantly for all bond durations.
- Corporate credit spreads increased for all bond durations.
- Short-term Government of Canada bond yields increased by approximately 36 bps compared to an increase of 44 bps for the 30-year term bond. Market expectations for long-term inflation increased by approximately 0.05% during the month.
- The accounting pension expense index saw a meaningful drop in April as the accounting discount rate increased significantly