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Pension Indices: March 2022

Pension Indices: March 2022

April 5, 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.

Highlights:

  • Over the month of March, the funded position of a typical pension plan improved on both a solvency and accounting basis.
  • The investment return was -0.4% for the month for a representative pension plan portfolio. The Canadian equity index finished the month with a strong return of 4.0%. On the other hand, returns for Canadian bond indices were negative as yields increased significantly for both short-term and mid-term bonds. The yield curve flattened as short-term Government of Canada bond yields increased by approximately 80 bps compared to an increase of 25 bps for the 30-year term bond.
  • Corporate credit spreads increased by approximately 0.10% for mid-term bonds and remained relatively stable for long-term bonds during the month.
  • Market expectations for long-term inflation increased by approximately 0.08% during the month.