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Pension Indices: October 2021

Pension Indices: October 2021

November 3, 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.


  • The funded positions of a typical pension plan improved on both solvency and accounting bases over the month of October and are at their highest levels so far in 2021.
  • Investment returns were positive, with a typical pension plan achieving approximately 1.6% in October. Equity markets returns were broadly positive, supported by stronger than expected earnings growth. Returns on most bonds were negative as yields increased at short-term and medium-term maturities, as the yield curve flattened.
  • Non-indexed 30-year Government of Canada bond yields increased by 4 bps, and the equivalent but indexed bond yield increased by 1 bps, indicating that market expectations for long-term inflation increased only narrowly by approximately 3 bps over the period.
  • Corporate credit spreads contracted slightly at long-term maturities, whereas they increased slightly at medium-term maturities.
  • 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.