A 2026 study from the Canadian Institute of Actuaries and the University of Waterloo's Pension Management Institute indicates that defined benefit (DB) pension plans in Canada are demonstrating resilience. The research, based on a survey of plan sponsors, found that the aggregate funded status of these plans has improved, with many now in a surplus position.
The study reports sustained interest among plan sponsors in retaining their DB plans, countering narratives of widespread termination. Key factors contributing to this stability include strong investment returns over recent years and higher interest rates, which have reduced liability valuations. Employers cited reasons for maintaining plans, including their value as a recruitment tool and a sense of obligation to employees.
Regarding surplus assets, the study notes that sponsors with surplus plans are more likely to use the funds for contribution holidays or benefit improvements rather than plan wind-ups. The findings suggest a shift from the defensive strategies seen in previous decades, though challenges related to longevity risk and regulatory complexity persist.
