Canadian DB pension solvency hits all-time high as rate surge trims liabilities
Marsh’s report outlines several paths sponsors can take. Plans may choose to stress-test their portfolios against adverse economic scenarios, adopt additional risk controls, or offload exposure by purchasing group annuities from insurers – a transaction that transfers both investment risk and longevity risk to a third party. Adjusting funding policies to regulate the use of surplus assets – whether for contribution holidays, benefit improvements, or drawdowns – is also on the table.
Separately, Marsh’s 2026 Global Asset Owner Barometer found that 66 per cent of Canadian asset owners planned to increase their infrastructure allocations, replacing some of the US equity exposure they have been trimming. That kind of asset mix shift can be advanced more decisively when solvency ratios provide a meaningful buffer.
Whatever strategy sponsors pursue, Marsh cautioned that fiduciary duties must remain central to every decision. The purpose of a pension plan is to pay benefits to members at a reasonable cost and any use of surplus needs to be evaluated against that core mandate.
Advisors watching the de-risking window
For wealth management professionals advising plan sponsors, the current environment points to an unusually clear opportunity. With plan funding at levels that give sponsors genuine strategic latitude, conversations about de-risking, liability-driven investing, and annuity purchases are increasingly moving from theoretical to practical.
The Marsh data covers plans across every industry and across public, private, and not-for-profit sectors in Canada, making it one of the broader snapshots of DB plan health available nationally. The next Pension Health Pulse will cover the period ending December 31, 2026.
