Corporate pensions face a funding crisis, with the average defined benefit plan underfunded by about 15 per cent. As this briefing notes, however, the situation is not entirely bleak: corporate Canada is well aware of the acute nature of the problem, and public policy-makers are asking the right questions about how best to minimize it.
The Pension Plan Crisis: Canada’s CFOs Are Worried—With Good Reason
The Pension Plan Crisis: Canada’s CFOs Are Worried—With Good Reason
Canadian Economic Analysis
People and Culture
$140.00
Corporate Canada confronts a pension crisis. The numbers tell the story: despite several years of economic upturn and robust stock market returns, as well as catch-up payments made by many plan sponsors, the country’s defined benefit pension plans remain substantially underfunded. As of May 2005, the average defined benefit (DB) plan was only 85 per cent–funded—a sharp drop from over 110 per cent–funded five years earlier. Amid the gloom, however, there is some basis for hope: corporate Canada is clearly well aware of the acute nature of the problem, and federal and some provincial policy-makers are asking the right questions about how best to minimize it. Among these are those raised in a recent discussion paper from Finance Canada. As this briefing notes, if we get the right answers, we will be much closer to a solution to the DB pension crisis.
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