In the third quarter of 2018, pension funds posted a median return of 0.4 per cent before management fees, according to Morneau Shepell’s Performance Universe of Pension Managers' Pooled Funds report for the third-quarter released Oct. 25.
"Global stock markets delivered mixed returns in the third quarter with U.S. equities outperforming other major markets, with returns of 5.7 per cent in Canadian dollars for the S&P 500. It was a negative quarter for emerging market equities, returning -2.7 per cent in Canadian dollars, and Canadian equities, returning -0.6 per cent. Bond returns in Canada were also negative in the third quarter, at about -1.0 per cent for the market as a whole," said Jean Bergeron, vice-president responsible for the Morneau Shepell Asset & Risk Management consulting team.
Solvency ratios improve
"Although asset returns were negative, the decrease in actuarial liability was larger. Pension fund financial positions on a solvency basis thus improved for the third quarter of 2018. The solvency ratio for an average pension plan has improved by about 0.5 to 2.0 per cent since the beginning of the quarter," added Bergeron.