CANADA - Canadian pension funded ratios were at the highest level in five years, according to Watson Wyatt.
The consultants found the average level to be 105% at the end of September 2007.
David Burke, retirement practice director at Watson Wyatt, Canada, said: “The typical plan has now developed a small cushion against future adverse experience.”
Burke added: “Given improved funding ratios and the recent market conditions, some sponsors will now find it more palatable to move to a more conservative investment strategy.”
Watson Wyatt’s data found improvement in 2006 had been driven by a combination of strong investment returns and rising interest rates, whereas 2007 improvements had been driven primarily by higher interest rates.
The report stated that aggressively invested funds had fared only marginally better than more conservatively invested funds over the course of 2007.
Burke pointed out that changes in the market could change current positions but there could be an opportunity to reduce future risk without locking in large deficits or be forced to make significant special contributions.
New regulatory rules which require providers and advisers to produce annuity illustrations will not solve the problem of consumer detriment as they are "fundamentally" flawed, according to Retirement Advantage.
Paul Budgen is set to join financial technology and auto-enrolment (AE) firm Smart Pension as director of business development.
This week's edition of Professional Pensions is out now
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