DBRS has released its annual study assessing pension plans, which concludes that the pension funding crisis is largely a myth.

The study reviews 536 pension plans, predominantly North American defined benefit plans, and notes the current funding and deficiency levels of each. “The main finding of this year’s pension review is that public perception of serious funding problems in defined pension plans, in both Canada and the United States, is a myth,” the rating agency reports.

DBRS looked at plan performance, assumptions used, demographics, and regulatory and legislative changes when evaluating the 2002 to 2006 results of each pension plan. “When combined, these factors provide a clear picture of a healthy overall pension system,” it concludes.

DBRS vice president Peter Schroeder notes that, “Last year was a watershed year for pension plans, we found that over 25% of the plans reviewed can be classified as being overfunded, while over 70% could be described as well funded.”

Schroeder adds, “With expectations of increases in future long-term interest rates, reasonable equity returns and further adjustments to recent regulatory changes, we expect, on an aggregate basis, that pension deficiencies will be eliminated in 2007 and we will see an increase in the number of fully funded plans.”