Pension plans boost funded ratios to 112.6% as assets rise and liabilities ease
Canadian defined benefit pension plans tied to the S&P/TSX Composite Index closed 2025 with an aggregate funded ratio of 112.6 percent, up from 111.9 percent a quarter earlier and 107.5 percent at the end of 2024, according to Aon plc (NYSE: AON).
According to Aon’s Pension Risk Tracker, which calculates the aggregate funded position on an accounting basis for companies in the S&P/TSX Composite Index with defined benefit plans, pension assets rose 0.6 percent over the fourth quarter of 2025.
Aon reported that the long-term Government of Canada bond yield increased by 18 basis points relative to the previous quarter, while credit spreads narrowed by 7 basis points, resulting in an 11-basis-point increase in the discount rate to 4.69 percent.
Wealth Professional reported that the improvement in funding levels came as modest asset growth combined with higher discount rates to reduce liabilities in what it described as a turbulent investment environment.
“Pension plan performance was solid in 2025,” said Nathan LaPierre, partner for Wealth Solutions in Canada at Aon.
He noted that this strength came “despite the significant volatility and uncertainty experienced by investors throughout the year,” and said plan sponsors remain resilient as they consider how best to defend their plans against ongoing uncertainty in 2026.
