Defined benefits (DB) pension plans in Ontario earned 2.7 per cent returns in the fourth quarter of 2022 and solvency ratios ended the year at the all-time high level first reached earlier in 2022, according to the most recent research from the Financial Services Regulatory Authority of Ontario (FSRA).
The regulator published its quarterly solvency report for the fourth quarter of 2022, showing that pension plan liabilities also continued to benefit from rising interest rates. “The majority of plans remained fully funded on a solvency basis at December 31, 2022,” they write.
At the end of the fourth quarter, the median projected solvency ratio was 112 per cent, a three per cent increase over the 109 per cent posted at the end of September 2022. The percentage of pension plans projected to be fully funded on a solvency basis was 81 per cent.
FSRA, meanwhile, announced the launch of an annual pension awareness day, this year occurring on February 16. They’re doing this, they say, because there are more than 175,000 “missing” pension plan members in Ontario who can’t be located by the pension plans they belong to. Caroline Blouin, executive vice president of pensions with FSRA, says collectively these individuals, or their estates, are entitled to more than $3-billion in assets.
“We are observing that many individuals do not stay connected to the pension benefits as they move through different roles in their working lifetime. By law, an employer providing a pension plan is required to provide its member with an annual pension statement,” or a statement every two years for retired and terminated members, she says. “We’re hoping pension plan members in the province take the opportunity on Ontario’s first annual pension awareness day, February 16, to ensure their plan has updated contact information on file.”
She adds that missing members can be those who’ve passed away without claiming their benefits, while others are retired and unaware they are entitled to savings. Those still working also may not know about the benefits they’ve accumulated.
“We’re getting a better sense of how big the issue is. The full scope started to become clear after new legislation required plans to communicate with terminated and retired members at least every two years, starting in 2017,” Blouin says. “We’ve provided direction to pension plans through guidance and have been collecting data to better understand the issue and consider whether additional steps could be required to help connect missing members with the pension benefits they are entitled to.”
