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DB pensions saw strong returns in 2019

By The IJ Staff | February 12 2020 02:30PM

Photo: Freepik

Canadian defined benefit pension plans returned 14.0 per cent in 2019, according to the RBC Investor & Treasury Services All Plan Universe report.

This was the second highest annual return during the past 10 years and was mainly due to strong Canadian and global equity markets.

"Over the past 10 years, the average Canadian Defined Benefits plan has generated an annualized return of 8.0 per cent on its assets. These results are quite impressive, though we can't discount the impact of global uncertainty and trade tensions in the years ahead," stated David Linds, Managing Director and Head of Asset Servicing, Canada in a statement issued Feb. 12. "While the performance of equity markets suggests that investors expect to see continued growth, plan sponsors need to continue building robust strategies to prepare for higher volatility as earnings and fundamentals begin to slow."

The report, based on survey data from 119 Canadian defined benefit pension plans, indicates a small increase in the plans' median funded status to 101 per cent (as compared to 100 per cent in 2018). To learn more, consult the full report here.

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