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Canadian pension plans' health declines in first quarter -survey

Published 2016-03-31, 04:06 p/m
© Reuters. Canadian pension plans' health declines in first quarter -survey

TORONTO, March 31 (Reuters) - The financial health of
Canadian pension funds declined in the first quarter of 2016,
affected by volatile currency markets, weakness in equity
markets and lower bond yields, consultancy Aon AON.N said on
Thursday.
The quarterly survey of 449 Aon-Hewitt-administered Canadian
pension funds, which measures the plans' assets over liabilities
to calculate their solvency-funded ratio, showed overall pension
solvency dropped by 4.5 percentage points through the quarter.
The median solvency was 83.1 percent, compared with 87.6
percent at the end of the previous quarter
The survey highlighted the negative impact on the funds from
the improved strength of the Canadian dollar, which staged a
comeback to $0.77 in late March from $0.69 in mid-January. That
diminished the pension funds' returns from non-Canadian assets.
"Uncertainty in global economies is causing volatility in
commodities and currency, as well as raising concerns about
equity valuations and interest rate direction," said Ian
Struthers, partner at Aon's Investment Consulting Practice.
Canada's largest public pension funds have continued to
perform strongly, benefiting from their strategy of investing in
assets such as real estate, infrastructure and private equity as
an alternative to public market investments.
The Ontario Teachers Pension Plan, Canada's third biggest
public pension fund, reported on Wednesday a 13 percent return
on its investments in 2015.

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