Pension Indices by TELUS Health: May 2024

May was a month of mixed results for pension plans. While the funded position of a typical pension plan saw an increase on a solvency basis, it experienced a decrease on an accounting basis. However, the overall investment return was positive, coming in at 2.7 per cent for a representative pension plan portfolio. This boost was thanks to strong performances in both the equity and bond markets.

Global equity markets had a good run, with the MSCI ACWI index, which tracks developed and emerging markets, returning 3.3 per cent in Canadian dollar terms. Closer to home, the Canadian equity index, S&P/TSX Composite, wasn't far behind, finishing the month with a 2.8 per cent return.

In the bond market, short-term Government of Canada bond yields dropped by about 0.17 per cent, and long-term bond yields fell by approximately 0.21 per cent. Meanwhile, corporate bond credit spreads remained stable throughout May. As for inflation expectations, the break-even inflation rate edged down slightly to 1.82 per cent by the end of the month.

Overall, May brought solid investment gains, despite some ups and downs in pension plan funding and bond yields.

Click here to read the full report and learn more about the challenges and opportunities that are yet to come for pension plan sponsors and administrators.