OTTAWA (Reuters) – The solvency of Canadian private pension plans will take a hit by year-end if the current turmoil on financial markets persists, Canada’s banking regulator said on Wednesday.
Julie Dickson, who heads the Office of the Superintendent of Financial Institutions (OSFI), said pension plans that she regulates were 90 percent funded as of June, which she described as “not bad”.
However, equity markets have fallen hard since then, while already low bond yields have retreated further.
“We’ll see what happens at the end of the year. I think that markets are hard to predict, they could bounce back. No one knows where interest rates are going to go, so I wouldn’t write off plans yet,” she told the Senate Standing Committee on Banking, Trade and Commerce.