Normandin Beaudry Pension Plan Financial Position Index – Quebec Municipal and University Sector, March 31, 2026

Normandin Beaudry has updated its pension plan financial position index as at March 31, 2026, tracking defined benefit pension plans in Canada. The information below highlights the segment specific to the Quebec municipal and university sector. Click the following link for our Canadian index, which excludes this sector.

Note: The components are distinguished by years of service accumulated before and after January 1, 2014, for the municipal sector and January 1, 2016, for the university sector.

Our index tracks both funding valuation bases:

• going concern, which relies on long-term assumptions from a perspective of indefinite operation of the plan; and
• solvency, which measures financial position in the event of plan termination, relying on assumptions based on the bond and insured annuity markets.

Pension plan surpluses remain high despite a slight decline in the first quarter of 2026. The financial market slump in March linked to the military conflict in Iran was preceded by generally positive returns at the start of the year, such that the loss in returns in the first quarter was modest overall.

It should be noted that the results shown do not account for the anticipated impact of the new mortality tables recently published by the Canadian Institute of Actuaries (CIA). The combined impact of using the CPM2024 mortality table, published on March 11, 2026, and the CanMI-2024 improvements scale, published in 2024, translates to approximately one additional year of life expectancy at age 65. This adjustment corresponds to an estimated increase of 2% to 3% in liabilities and current service costs. In the coming months, the adoption of these new tables by actuaries will be monitored for going concern valuations. With respect to solvency valuations, actuarial standards will need to be updated before they can be applied.

Note: The illustrated going concern financial positions are adjusted to include the full market value of assets. They therefore include the reserve in the prior component and the stabilization fund in the subsequent component, and exclude the effect of asset smoothing.

The first quarter of 2026 was characterized by increasing geopolitical tensions. Despite an unstable global context and several major events involving the United States, particularly concerning Venezuela, Greenland and Cuba, global stock market returns were generally positive in the first two months of the year.

However, this market upturn was reversed in March, following the escalation of the military conflict in Iran. The blockade of the Strait of Hormuz—through which around 20% of the world’s oil supply passes—exerted immediate pressure on energy markets. The resulting surge in the oil price per barrel was quickly passed on to consumers, and several countries are now having to ration their reserves.

Although key rate cuts were expected in 2026, markets are now anticipating an increased risk of monetary tightening. Rising energy costs are exerting pressure on supply chains, raising the possibility of a return to inflation after several months of calm. This was reflected in the bond market with a general increase in interest rates.

Uncertainty persists around how the conflict in Iran will unfold. Although the United States has an economic and political interest in a swift resolution, it is difficult to anticipate how long the conflict will last, which could continue to fuel market volatility.

On top of the geopolitical tensions, the quarter was also characterized by a general downturn in the technology sector, particularly among companies specializing in software solutions. The potential impact of artificial intelligence on these companies and specifically on the skilled workforce has sent shockwaves through the sector.

A number of plans are now showing surpluses on both a going concern and solvency basis. Although there was little variation in the financial position from beginning to end of the quarter, the trajectory over the quarter highlights the inherent variability to which pension plans are exposed.

In a context where strategic decisions made by sponsors and administrators can have significant—and sometimes irreversible—effects, it remains essential to rely on data that is accurate, relevant and up to date.

By referring to a pension plan dashboard that incorporates periodic updates on the financial position, administrators can obtain a clear portrait of developments since the most recent actuarial valuation. These dashboards can account for changes in the economic context, amendments to the investment policy and the impact of adjustments to assumptions, including the integration of the new mortality tables mentioned above.

As a result, this type of dashboard is an essential tool for guiding decisions related to the next actuarial valuation, whether that involves setting margins for actuarial assumptions, using surpluses or purchasing insured annuities.

Interested in learning more about the pension plan dashboard we offer our clients? Contact your Normandin Beaudry consultant or email us.

The Normandin Beaudry Pension Plan Financial Position Index is calculated by projecting the pension plan financial data of its clients in the Quebec municipal and university sector. A separate index is published for the plans of Canadian clients outside of this sector. Assets are projected based on the performance of market indices. Liabilities projected on a going concern basis use an estimated discount rate based on each plan’s asset allocation and the sensitivity of asset classes to changes in interest rates on Government of Canada bonds. The rates for transfer values used on a solvency basis are those prescribed by the Canadian Institute of Actuaries and are therefore based on the previous month’s market interest rates.