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Pension Indices: July 2021

Pension Indices: July 2021

August 6, 2021

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.

Highlights:

  • The funded position of an average pension plan deteriorated slightly over the month of July, on both a solvency and accounting basis.
  • Investment returns were 1.2% over the month for a representative pension plan portfolio. Fixed income assets generated positive returns, benefiting from a decrease in bond yields. Equities returns were also generally positive. Canadian and emerging markets equities lagged foreign developed markets.
  • Non-indexed long-term Government of Canada bond yields decreased by 0.1% in July, and corporate and provincial bond yields also fell which led to a higher value being placed on solvency and accounting plan liabilities.
  • The accounting pension expense index continues to register a significant fall in next year’s anticipated pension expense compared to the start of the year.
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