New data from RBC Investor Services (RBCIS) shows that a boom in commodity stocks and surging emerging markets have helped Canadian pension plans outpace global indices in 2025.

“RBCIS reported mixed performance for Canadian defined benefit (DB) pension plans under its administration in 2025: median returns were 0.6 per cent for Q4 2025 and 7.9 per cent for the full year. This followed a stronger year in 2024, where the median return was 1.6 per cent for Q4 and 11.3 per cent on an annual basis,” they write.

Notably, Canadian equities in RBC’s client plans returned 6.1 per cent, up from 3.2 per cent reported in the fourth quarter of 2024, and 31.1 per cent for the full year. This is up from 21.2 per cent reported in 2024. The figures closely track the S&P/TSX Composite Index, which gained 6.3 per cent during the fourth quarter and 31.7 for all of 2025. Performance was driven by the materials sector and financials. “These sectors dominated the index’s 2025 gains, contrasting with 2024’s more evenly distributed growth,” they write.

Aggregate funded ratio 

The aggregate funded ratio for Canadian pension plans in the S&P/TSX Composite Index, meanwhile, increased to 112.6 per cent by the beginning of January. This is up from the 111.9 per cent reported by Aon plc at the end of the third quarter in 2025, and up from 107.5 per cent reported for the same period a year ago.

“The Aon Pension Risk Tracker calculates the aggregate funded position on an accounting basis for companies in the S&P/TSX Composite Index with DB plans,” the Aon January 2 release explains.

At the same time, Mercer, a business of Marsh McLennan, said Canadian DB plans “generally demonstrated impressive resiliency throughout the year.” That company’s Mercer Pension Health Pulse, which tracks the median solvency ratio of the 471 DB plans in Mercer’s pension database, shows the median solvency ratio was 132 per cent at the end of 2025. “This is a notable increase of seven per cent in the ratio during 2025, including three per cent in the final quarter,” they stated in early January, mirroring RBC’s report that strong returns on equities and modest returns on fixed income drove results during the year.

The company adds that 68 per cent of plans in its database had a solvency ratio above 120 per cent, an increase from 55 per cent of plans at the beginning of the year. They also say the number of plans with a solvency ratio above 100 per cent also improved from 88 per cent to 92 per cent in 2025.

Significant surpluses 

“Many pension plans have developed significant surpluses that serve as security margins as they head into the new year,” the Mercer report continues. “The dot-com bubble, the global financial crisis and COVID all hit when the financial standings of DB plans were already challenging. The current cushions allow plan sponsors to prepare for potential unfavourable scenarios and adapting their risk management frameworks accordingly.” 

Monitoring economic activity will be key for plan sponsors, they warn, adding again that “pension plans with significant surpluses may be better positioned to handle economic challenges.”