The aggregate funded ratio for Canadian defined benefit pension plans in the S&P/TSX Composite Index reached 116.7 percent at the end of the second quarter of 2026, up from 111.4 percent in the previous quarter, according to data released by Aon plc.
Key financial drivers
The Aon Pension Risk Tracker, which has monitored the accounting-based funded position of these plans since 2013, reported that pension assets gained 1.6 percent over the second quarter of 2025. The long-term Government of Canada bond yield increased by 33 basis points relative to the prior quarter, while credit spreads narrowed by 9 basis points. This combination resulted in an increase in the discount rate of 24 basis points, bringing it to 4.67 percent.
Market volatility and plan sponsors
“Pension plans regained the ground that they had lost in the first quarter of the year, but volatility and uncertainty are still the name of the game,” said Nathan LaPierre, partner for Wealth Solutions in Canada for Aon. “Pension plan sponsors continue to evaluate how they may shield their plans from that uncertainty.”
The improved funded ratio reflects stronger asset performance and higher discount rates, which reduce the present value of pension liabilities. However, ongoing economic uncertainty remains a concern for plan sponsors seeking to mitigate risk.
About Aon and the tracker
Aon plc (NYSE: AON) is a global professional services firm providing risk, retirement, and health solutions. The Aon Pension Risk Tracker calculates the aggregate funded position on an accounting basis for companies in the S&P/TSX Composite Index with defined benefit plans. The data helps plan sponsors and stakeholders assess the financial health of pension plans amid changing market conditions.
