Canadian pension funding climbs to 109% as assets rise and discount rate strengthens
Canadian pension plans in the S&P/TSX Composite Index ended the second quarter of 2025 with a funded ratio of 109 percent, according to Aon plc’s Pension Risk Tracker.
This marks an increase from 105.5 percent at the end of the previous quarter.
The improvement came as pension assets grew 1.6 percent during the quarter.
At the same time, the long-term Government of Canada bond yield rose 33 basis points, while credit spreads narrowed by 9 basis points.
These factors contributed to a 24 basis point increase in the discount rate, now at 4.67 percent.
“Pension plans regained the ground that they had lost in the first quarter of the year,” said Nathan LaPierre, partner for Wealth Solutions in Canada at Aon.
He added that volatility and uncertainty remain dominant concerns, and plan sponsors are still assessing how to protect their plans from those risks.
Aon’s 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 tool has tracked this data since 2013.
