Defined benefit (DB) pension funds in RBC Investor Services’ (RBCIS) client database produced an impressive 11.3% median return in 2024. The universe includes funds in both the public and private sectors.
The median return in the year’s final quarter was 1.6%, a fourth consecutive quarterly gain, according to Isabelle Tremblay, asset owner segment lead at RBC Investor Services.
“Our analysis shows solid annual returns for RBCIS DB pension plans,” she said in a media release, “but also emphasizes the need for diversification and active risk management, especially as we enter a year of uncertainty.”
Global equity investments produced a 24.1% annual return for the pension funds. That included a 4.1% return in Q4, in part as a result of U.S. equity returns that were boosted by a weakening Canadian dollar.
Canadian equities delivered the funds 21.2% for the year, and a 3.2% Q4 gain.
Canadian bonds earned 3.6% in 2024 for the funds, including a 0.2% loss in the fourth quarter.
“Plan managers continue to adapt their strategies for the evolving pension landscape as we prepare for political changes, including possible U.S. government policies and new Canadian Prime Minister,” Tremblay said.