AON's tracker shows small dip in assets as discount rates edge higher in early 2026
Canadian defined benefit pension plans in the S&P/TSX Composite Index entered 2026 with funded ratios still well above 100 percent, even as the aggregate level slipped over the first quarter.
Aon said the aggregate funded ratio for these plans decreased to 111.4 percent at March 31, from 112.6 percent at the end of the previous quarter.
A year earlier, the ratio stood at 105.5 percent, based on figures from the Aon Pension Risk Tracker, which measures the aggregate funded position on an accounting basis for index constituents with defined benefit plans.
Over the first quarter of 2026, pension assets fell 0.9 percent.
At the same time, the long-term Government of Canada bond yield rose three basis points and credit spreads widened six basis points, lifting the discount rate by nine basis points to 4.78 percent.
“The first quarter of 2026 was volatile, with strong equity returns in January and February, followed by declines in March amid the geopolitical context,” said Nathan LaPierre, partner for Wealth Solutions in Canada for Aon.
He said funded positions “remained relatively stable with only one percent decline,” but warned that, as uncertainty may continue into 2026, plan sponsors should keep looking for strategies that deliver better outcomes.
