In a stunning example of just how much corporate pension systemsgained as the markets climbed, Air Canada announced it projects itsretirement system started 2014 with a slight surplus a year afterposting a $3.32 (American dollars) billion deficit.

Investment returns of 13.8 percent, raising the discount rateused to determine future liabilities, a company contribution of $201.9million to the system and a four-year strategy of matchinginvestments to liabilities all contributed to eliminating thedeficit, Canada’s largest air carrier said.

Over the last four years, the airline reported a totalinvestment return of 11.8 percent. Final figures for 2013 are stillbeing tabulated.

The rise of Air Canada’s pension fund is indicative of theindustry as a whole. Data provided by Towers Watson showed that theaverage corporate retirement system was 95 percent funded atthe end of 2013, a marked rise from a year earlier.

The company plans to match all of its liabilities to fixedincome instruments. Currently, 70 percent of the pension fund’sportfolio is matched that way.

“Air Canada's three primary pension objectivesare to ensure our employees’ and retirees’ pensions are secure, thepension solvency deficit is eliminated and the costs associatedwith maintaining the pension plans remain affordable, predictableand stable,” said Calin Rovinescu, said Air Canada’s president CEO,in a statement.

The government requires the airline to contribute at least$134.6 million annually to the pension fund with a seven-yearaverage of $179.4 million.

If funding requirements dip below certain levels, the airlinewould be allowed to opt out of the regulations. It said it did notexpect to do so this year.