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Article | Global Pension Finance Watch

Global Pension Finance Watch: Fourth Quarter 2022

By Nathan Pavlik and David Finn | January 23, 2023

Although there was still notable movement to both discount rates and asset performance over the course of the quarter, Q4 2022 was less volatile than others this year.

The direction of movement varied by country, but discount rates ended the period in a relatively similar position to the end of Q3. Asset performance was modestly positive, and inflationary pressures remain but show signs of subsiding. Overall, the combined effects drove positive fourth quarter pension index results for all countries except for U.K. which has stabilized after the brief period of financial instability at the end of Q3. Foreign currency exchange rates have also stabilized somewhat over the quarter, ending a run of strength for the U.S. Dollar. The Pension Index improved across all regions for the full year – improvements were double digits in Eurozone, Japan, U.K. and the U.S., and improvements were strong single digits for Brazil, Canada, and Switzerland.

While it is always the case that Global Pension Finance Watch captures results at the end of each quarter, we particularly want to highlight the point in time view of this publication in light of recent volatility. WTW supports the daily monitoring of pension funded status and other key pension financial metrics for those organizations wishing to inform key business decisions.

About this report

Global Pension Finance Watch, published quarterly, reviews how capital market performance affects defined benefit pension plan financing in major retirement markets worldwide, with a focus on linked asset/liability results. We cover defined benefit pension plans in Brazil, Canada, the Eurozone, Japan, Switzerland, the U.K. and the U.S. Specific plan results will vary, often substantially, based on liability characteristics, contribution policy, portfolio composition and management strategy among other factors. The passage of time since quarter end, may also have a significant impact on pension plan financing.

The impact of capital markets on these pension plans is twofold:

  • Investment performance on fund assets
  • Changes in economic assumptions on plan liabilities (as measured under international accounting standards)

If you have questions or comments about this report, please contact our WTW experts.

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Global Pension Finance Watch: Fourth Quarter 2022 PDF .3 MB

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