Ontario pension solvency fell to 119% in Q1 2025, with FSRA projecting more declines due to market conditions
Despite a drop in solvency levels to 119% in the first quarter of 2025, Ontario’s Financial Services Regulatory Authority (FSRA) reports that most defined benefit pension plans remain above required funding thresholds, even as further declines are projected due to ongoing market uncertainty.
FSRA’s Q1 2025 Solvency Report, covering the period from January 1 to March 31, shows the median solvency ratio for defined benefit pension plans fell three percentage points from the previous quarter.
The regulator also issued an estimate for the first week of April, indicating that the median solvency ratio likely declined an additional five percentage points from the end of Q1, citing adverse market conditions following the announcement of US tariffs.
The report states that while solvency levels have declined, most plans continue to meet funding requirements. The solvency ratio measures a plan’s ability to meet its obligations if terminated at a given time, with a ratio above 100% indicating sufficient assets to cover liabilities.
Andrew Fung, FSRA executive vice president of pensions, said the recent developments require active attention from plan administrators. He stated that although plans remain resilient, the global trade situation and ongoing economic uncertainty make it important for administrators to manage risk and reassess investment strategies to support long-term sustainability.
FSRA recommends that pension plan sponsors employ tools such as stress testing, modeling, and other analyses to assess potential vulnerabilities.
The quarterly solvency report is part of FSRA’s regular publication schedule to monitor and report on the financial health of defined benefit pension plans registered in Ontario. The updates are intended to inform plan members and stakeholders about the funding status of their plans and provide context on the economic environment influencing plan performance.
As of year-end 2024, most Ontario pension plans reported solvency ratios exceeding 100%. The Q1 2025 report provides the first update since the introduction of new U.S. trade measures and their associated effects on global markets. FSRA stated it will continue tracking solvency data in future quarters to monitor developments.
FSRA regulates over 1,400 defined benefit pension plans in Ontario and issues solvency reports quarterly. The regulator said timely reporting supports transparency and helps plan administrators and members stay informed of funding conditions.
In 2024, solvency ratios hovered between 122% and 123% for most of the year before easing to 121% in Q3. FSRA stated it will continue tracking developments and provide updated assessments in future quarterly reports.
