Alison MacAlpine
The average defined benefit pension plan saw its funded position continue to improve in April on a solvency and accounting basis, according to a new report by Morneau Shepell Ltd.
During the month, bond yields and credit spreads stabilized, although long-term bond yields increased slightly, negatively affecting long-term fixed income returns. Global equities performed well, rising 2.4 per cent as measured by Morneau Shepell’s world index.
Against this backdrop, the Canadian Institute of Actuaries released new guidance on solvency valuation assumptions in early May, with annuity purchase discount rate guidance that shrank the spread relative to Government of Canada bonds by 20 basis points.