Pensions lose ground in 2008: Mercer

Plans squeezed by negative equity returns, declining bond yields
||Last Updated: 06/06/2008

The financial health of Canadian pension declined significantly at the end of the first quarter of 2008, to levels not seen since the middle of 2005, according to a report from Mercer.

“Equity returns were negative in Canadian dollar terms in almost all regions for the second quarter in a row,” said Peter Muldowney, business leader for Mercer’s investment consulting business in Canada. “This meant the asset side of the Canadian pension plan balance sheets continued to take a pounding in the first quarter of this year.”

The Mercer Pension Health Index, which measures the solvency funded status of plans, reached its lowest point on March 31, falling to 77 per cent from 82 per cent in December, 90 last summer and 120 in late 2000.