As the first quarter of 2025 wraps up, TELUS Health’s latest Pension Indices report provides valuable insights into a dynamic and evolving pension landscape. While March saw a modest decline in the funded status of a typical pension plan — on both a solvency and accounting basis — the quarter as a whole highlights important trends and opportunities. Amid shifting global conditions and ongoing economic recalibrations, both employers and employees have a timely opportunity to assess strategies, adapt to change, and strengthen long-term financial planning.
In March, the representative pension plan portfolio returned -2.5 per cent, reflecting widespread market volatility. Global equities fell, with the MSCI All Country World Index down -4.0 per cent and the S&P/TSX Composite Index down -1.5per cent.
The Bank of Canada’s rate cut to 2.75 per cent continues to coincide with a steepening yield curve. During Q1 2025, real yields fell faster than nominal yields, signaling increasing growth concerns. These conditions may increase pension liabilities and influence investment returns, making strategic planning more important than ever.
Looking ahead, employers are encouraged to review their pension governance practices and enhance their communication with plan members. Employees and individual savers should revisit their retirement plans, stay informed, and remain flexible.
As Amy Pun, Associate Partner in TELUS Health’s Consulting practice, notes, “To navigate these evolving challenges, pension plans must remain agile... Scenario planning and climate-resilient investments are increasingly important in supporting long-term financial sustainability.”
For employers, Q1’s results are a call to revisit plan governance and communication. Transparent engagement with plan members is essential in times of uncertainty. For employees and individual savers, the message is clear: review your retirement strategy, stay informed on policy developments, and be ready to adapt.
As we enter the second quarter of 2025, expect continued market fluctuations and potential policy responses to evolving economic conditions. By staying agile and informed, both employers and employees can better navigate this uncertain environment and contribute to long-term retirement security for Canadians.
Click here to read the March report.