A review of 451 defined-benefit pension plans in Canada and the U.S. by debt rating agency DBRS has found the gap between plan assets and obligations widened significantly last year.
DBRS said several factors have contributed to the revised outlook, including continuing low interest rates. The review found the combined funding deficit ballooned to an unprecedented $389 billion in 2011. DBRS said that more than two-thirds of the defined benefit plans it reviewed were underfunded by "a significant margin."
Under defined benefit plans, employees generally make set contributions and are guaranteed a specific monthly retirement income.
Any shortfall in the ability of the plan to make those payments is usually the employer's responsibility.
