Robust Q3 investment gains push 92% of defined benefit plans above full funding, FSRA reports
Ontario’s defined benefit pension plans have reached their strongest financial footing on record, with a median solvency ratio of 124 percent—an all-time high—driven by robust 4.6 percent investment returns in the third quarter of 2025, according to the Financial Services Regulatory Authority of Ontario (FSRA).
The latest FSRA report, covering July to September, reveals that 92 percent of plans are now fully funded on a solvency basis, up from 89 percent in the previous quarter.
Only 2 percent of plans fell below the 85 percent solvency threshold, a slight improvement over last quarter’s figures.
FSRA attributes this positive trend to strong equity market performance, even as global economic conditions remain volatile and the Canadian dollar weakened against the US dollar.
“This quarter’s results demonstrate the resilience of Ontario’s pension plans in the face of a constantly changing global economy,” said Andrew Fung, executive vice president, Pensions, FSRA.
He emphasized that while the improvement is encouraging, funding positions remain highly sensitive to market fluctuations, underscoring the need for ongoing vigilance and disciplined risk management.
FSRA’s analysis notes that Canadian equities delivered a 12.5 percent return, while the S&P/TSX Composite Index posted another strong quarter.
The Canadian economy saw GDP growth of 0.9 percent year-over-year, though unemployment ticked up to 7.1 percent and inflation held at 1.9 percent.
Meanwhile, the Bank of Canada and US Federal Reserve each cut policy rates by 25 basis points in September.
The FSRA continues to encourage pension plan administrators to employ stress testing, modelling, and other analytical tools to assess potential risks and strengthen long-term sustainability.
