The sharp increase in discount rates drove positive first quarter pension index results for all regions. Asset returns were negative for all regions except Brazil for the quarter which partially offset the liability gains. Inflationary impact were most pronounced in the UK where plans provide annual pension increases based in inflationary indicators. The overall impact of these changes resulted in positive pension index returns for all markets during the first quarter.
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that Global Pension Finance Watch captures results at the end of each quarter, we particularly want to highlight the point in time view of this publication in light of the volatiliy. WTW supports the daily monitoring of pension funded status and other key pension financial metrics for those organizations wishing to inform key business decisions.
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:
If you have questions or comments about this report, please contact our Willis Towers Watson experts.
|Global Pension Finance Watch: First quarter 2022