Canadian pension plans pounded in 2008

Mercer study shows impact of economic downturn
|Canadian HR Reporter|Last Updated: 04/20/2009

The financial health of Canadian pension plans plummeted in 2008, as stock markets and interest rates declined sharply, according to the <i>Mercer Pension Health Index</i>, which fell to 59 per cent, down 23 per cent from the beginning of the year.

“Pension plans experienced substantial losses on both sides of the balance sheet, with lower long-term interest rates increasing liabilities,” said Paul Forestell, retirement professional leader at Mercer. “The new rules for determining the lump sum value of pension entitlements, which many jurisdictions will allow to be used early for 2008 year-end solvency valuations, will only partially mitigate the losses, reducing liabilities generally by only a few percent.”