Canadian defined benefit pension plans posted 'hard-hitting' losses last year amid volatile global economic conditions, according to a new survey RBC Investor & Treasury Services.
Canadian defined benefit pension plans posted “hard-hitting” losses last year amid volatile global economic conditions, according to a new survey RBC Investor & Treasury Services .found that the annual median return for pension assets within the RBC I&TS universe in 2022 was -10.3 per cent – the lowest since the 2008 recession, when the annual median return was -15.9 per cent.
“Pensions gained traction toward the end of 2022 despite the ongoing volatility caused by embedded inflation and subsequent higher interest rates imposed by central banks,” said Niki Zaphiratos, managing director of asset owners for RBC Investor & Treasury Services, in the report.The report said persistently high inflation and rising interest rates contributed to last year’s volatility, as yields rose “across the spectrum.
Canadian pensions “had their largest annual fixed income decline in more than 30 years,” the report said, losing 16.8 per cent over the course of 2022 compared with a -11.7 per cent return for the FTSE Canada Bond Index. Foreign equities were the top-performing asset class in the fourth quarter, RBC said, though the full-year results stood at -11.3 per cent.
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