New all-time solvency high for Canadian defined benefit pension plans driven by higher interest rates in Q3, Marsh finds 

TORONTO, October 5, 2026 – Marsh¹, a leading global professional services firm, today shares that the financial position of Canadian defined benefit (DB) pension plans reached a new all-time high in the third quarter of 2026, as higher interest rates more than offset slightly negative investment returns.

The Marsh Pension Health Pulse (MPHP), a measure that tracks the median solvency ratio of the DB pension plans in Marsh’s pension database shows that ratio was 132% as of September 30, 2026. The solvency ratio is one measure of a pension plan's financial health.

In the third quarter this year, the median solvency financial position of Canadian DB pension plans increased by 4%. This followed a 5% increase in the second quarter. As a result, losses from the first quarter have now been offset, and the median solvency ratio now exceeds the previous all-time high, set at the start of the year. While investment returns were slightly negative over the third quarter, higher interest rates reduced actuarial liabilities significantly, and more than offset the investment declines.

The Bank of Canada² held its overnight rate steady at 2.25% for the third consecutive quarter. However, yields on long-term government of Canada bonds steadily increased over the third quarter to levels not seen since 2023.

At the end of the third quarter, 69% of Canadian DB pension plans had a solvency ratio of 120% or more; 89% had a solvency ratio of 100% or more, while 11% of plans are estimated to be in a deficit position.

 “Canadian defined benefit pension plans continue to show strong resilience despite ongoing market and geopolitical volatility,” said Brad Duce, a Principal at Marsh based in Toronto. “Plan sponsors can use this period of strength to review risk, consider de-risking options with an aim of reinforcing their funding policies’ position.”

The current financial strength of DB pension plans gives sponsors an opportunity to assess how their plans would perform under potential economic scenarios. This could lead to adopting additional risk control measures to better face potential headwinds, offloading some risk through the purchase of annuities with an insurance company, or adjusting funding policies to better regulate the use of surplus assets for plan improvements or contribution holidays.

Surpluses may also offer sponsors the chance to continue adjusting their investment strategy, as outlined in Marsh’s 2026 Global Asset Owner Barometer, which found that Canadian asset owners were leading the way in reducing US equity allocations.

In replacing those allocations, the survey found that 66% of Canadian asset owners planned to invest more in infrastructure, a trend that aligns with recent discussions among Canadian pension investors, including at the Canada Investment Summit in Toronto. However, as plans adjust, any potential opportunities should be evaluated based on the main objective of pension plans, which is to pay benefits to plan members at a reasonable cost, and fiduciary duties should remain central in the decision-making process.

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² Bank of Canada, 2026 

Pension Health Pulse tracks the median ratio of solvency assets to solvency liabilities of the pension plans in the Marsh’s pension database, which includes financial, demographic and other information of Marsh’s pension plan clients in Canada. The database contains information on 435 pension plans across Canada, in every industry, across the public, private and not-for-profit sectors. The information for each pension plan in the database is updated every time a new actuarial funding valuation is performed for the plan.

The financial position of each plan is projected from its most recent valuation date, reflecting the estimated accrual of benefits by active members, estimated payments of benefits to pensioners and beneficiaries, an allowance for interest, an estimate of the impact of interest rate changes, estimates of employer and employee contributions (where applicable), and expected investment returns based on the individual plan’s target investment mix, where the target mix for each plan is assumed to be unchanged during the projection period. The investment returns used in the projections are based on index returns of the asset classes specified as (or closely matching) the target asset classes of the individual plans. For more information, visit Marsh Pension Health Pulse.   

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The findings, ratings and/or opinions expressed herein are the intellectual property of Marsh and are subject to change without notice. They are not intended to convey any guarantees as to the future performance of the investment products, asset classes or capital markets discussed. Information contained herein may have been obtained from a range of third party sources. While the information is believed to be reliable, Marsh has not sought to verify it independently. As such, Marsh makes no representations or warranties as to the accuracy of the information presented and takes no responsibility or liability (including for indirect, consequential or incidental damages), for any error, omission or inaccuracy in the data supplied by any third party. This does not constitute an offer or a solicitation of an offer to buy or sell securities, commodities and/or any other financial instruments or products or constitute a solicitation on behalf of any of the investment managers, their affiliates, products or strategies that Marsh may evaluate or recommend. This does not contain investment advice relating to your particular circumstances. No investment decision should be made based on this information without first obtaining appropriate professional advice and considering your circumstances.

Marsh (NYSE: MRSH) is a global leader in risk, reinsurance and capital, people and investments, and management consulting, advising clients in 130 countries. With annual revenue of $27 billion and more than 95,000 colleagues, Marsh helps build the confidence to thrive through the power of perspective. For more information, visit marsh.com, or follow us on LinkedIn and X.