Pension Fund Deficits — The Next Big Thing

This article was first published in Blakes Bulletin on Pension & Benefits - January 2004

Volatile stock markets, corporate accounting scandals and a depressed US economy are among the factors that have had a significant negative effect on pension plan funding. In fact, according to a recent study by three Canadian consulting firms, that may be an understatement. The study estimates public and private pension plans in Canada face a combined funding deficit of $225 billion. The Office of the Superintendent of Financial Institutions (OSFI) also confirms that funding shortfalls have reached critical levels. It found over 50% of Canada’s 1,205 pension plans in a deficit position. Of those, 55% are underfunded by 10% or more.