In April, the funded status of a typical pension plan improved on both a solvency and accounting basis.
The representative pension plan portfolio returned 3.4 per cent in April, driven by strong performance across equity markets.
The global developed and emerging equity markets index returned 7.5 per cent in Canadian dollar terms and Canadian equities finished the month with a return of 4.3 per cent.
Short-term Government of Canada bond yields increased by approximately 0.14 per cent and long-term Government of Canada bond yields increased by approximately 0.05 per cent over the month.
Corporate bond credit spreads decreased by 0.07 per cent for short-term bonds and 0.09 per cent for long-term bonds. Market expectations for long-term inflation (the break-even inflation rate) were approximately 2.07 per cent at the end of April, which represents a slight increase of 0.02 per cent since the end of March.
“One of the interesting recent developments in the Canadian retirement system is the federal government’s announcement in their Spring Economic Update 2026 that they intend to introduce legislative amendments to decrease Canada Pension Plan (CPP) contributions, effective January 1, 2027, while keeping CPP benefits unchanged” says Gavin Benjamin, Partner in TELUS Health’s Retirement & Benefits Solutions practice.
“The proposed decrease in CPP contributions, which aligns with the plan’s strong financial position shown in the 32nd Actuarial Report on the CPP, is modest, as it will translate into an annual savings of $133 for an employee who earns $70,000 per year. However, this decrease in contributions follows a phase-in during 2019 to 2025 of material enhancements to CPP and Quebec Pension Plan (QPP) benefits, along with associated contribution increases. These changes serve as a reminder that Canadian employees may receive retirement income from a number of sources, including CPP, QPP, and OAS. Employers should monitor changes to these other programs and take them into account when assessing the appropriateness of the design of the retirement arrangements that they offer to their employees.”