6.7% decline in the assets of its DB pension plan
Canada Post Corp. released its latest annual report, highlighting a 6.7% decrease in the assets of its defined benefit (DB) pension plan for the year 2022.
The DB component of the Plan saw an increase in surplus, rising from $4.9 billion to $6.5 billion on a going-concern basis. The funded ratio, representing the financial position of the Plan in relation to assets and liabilities, improved to 127% by the end of the year, up from 120% in 2021.
"This going-concern valuation indicates the DB component of the Plan continues to have more than enough assets to meet its obligations to Plan members over the long-term,” said Jan Faryaszewski, chief financial officer of Canada Post.
The solvency position, reflecting market value, improved from a deficit of $2.6 billion to a surplus of $2.4 billion, raising the funded ratio from 92.6% to 108.7%.
"2022 was a turbulent year for financial markets,” Faryaszewski said. “The value of assets in the DB component of the Plan fell from $32.3 billion to $29.5 billion. At the same time, the DB component showed strong relative performance. The annual rate of return for the DB component was -6.7%, compared to our benchmark’s return of -11.7%.”
In the defined contribution (DC) component, assets grew from $139.7 million to $153.5 million.
“This partly reflects the growing number of employees who are members of the DC component of the Plan, with Canada Life as our service provider,” Faryaszewski said.
“We encourage DC members of the Plan to review their statements to see the personal rate of return on their assets, as well as consider speaking with a financial advisor to get personalized advice about their Plan investments.”
