RBC Investor & Treasury Services’ fourth annual survey of Canadian defined benefit pension plans, conducted in November of 2020, reflects the perspectives of 122 pension plans from across the country.
RBC Investor & Treasury Services’ fourth annual survey of Canadian defined benefit pension plans, conducted in November of 2020, reflects the perspectives of 122 pension plans from across the country.
4.0~
Declining confidence in meeting liabilities
50%
Proportion of fully-funded pensions—down from last year
Low interest rates
Top near-term challenge again this year
73%
Proportion of pensions that hold alternatives—up from last year
3.5~
Growing importance of SRI
~Based on a 5-point scale where 5=extremely confident/important and 1=not at all confident/important
of Canadians will be seniors by 2030— up from 17% in 20181
of pension assets are alternatives—more than tripling since 20042
of infrastructure investment will be required by 2040 globally3
of responsible investment assets are held by pensions4
1Statistics Canada and RBC Economics, September 17, 2019
2Pension Investment Association of Canada, defined benefit pension plans as at December 31, 2019
3The Economist, In the Works, January 2, 2021, USD
4Responsible Investment Association, Canadian RI Trends Report 2020
Confidence in meeting liabilities declines but remains bullish
LDIs and alternative investments are the top de-risking strategies
Fewer pension plans are fully funded
Pensions are increasingly embracing alternative investments
Low interest rate environment is the overriding concern
Real estate and infrastructure are the most popular alternatives
The pandemic will necessitate re-assessment of asset management strategies
The indirect alternative investment approach is most popular
Ongoing sustainability may require changes in asset mix
The importance of SRI increases but interest remains lukewarm
This year's survey includes the aggregate responses of 122 Canadian defined benefit pension plans, compared to 119 in the previous year.
RBC Investor & Treasury Services is a specialist provider of asset services, custody, payments and treasury services for financial and other institutional investors worldwide, with over 4,500 employees in 16 countries across North America, Europe and Asia. We deliver services to safeguard client assets, underpinned by client-centric digital solutions that continue to be enhanced and evolved in line with our clients’ changing needs. Trusted with $4.5 trillion in client assets under administration,1 RBC Investor & Treasury Services is a financially strong partner with among the highest credit ratings globally.2
David J. Giannone
Global Head of Business Development
david.giannone@rbc.com
Throughout this report, currencies are in Canadian dollars and percentages show proportion of choices unless otherwise indicated
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