Top Five Trends In Pensions And Benefits Law

This past year saw the introduction of some exciting developments in pensions and benefits law. If the past is any indication of the future, this next year will be just as active. The topics outlined below are 2014's most noteworthy legal trends in pensions and benefits law.

Show Me the Money – The Return of the Surplus

The combination of strong stock market returns and rising long-term interest rates led to 2013 being a bounce-back year in the funded status of Canadian defined benefit (DB) pension plans. Previously, many Canadian DB plan sponsors found themselves dealing with significant funding deficits due to a combination of: (i) depressed markets; (ii) historically low interest rates; (iii) increases in life expectancy; and (iv) greater-than-expected payouts of retirement pensions. As of January 2012, nearly 50% of the DB plans in Ontario were less than 80% funded,¹ and approximately 15% were less than 70% funded. Recently, those numbers have decreased to 6%