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Article | Global Pension Finance Watch

Global Pension Finance Watch: Third quarter 2021

Improved third quarter index results

Investments|Retirement
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By Nathan Pavlik and David Finn | October 22, 2021

Global discount rates continued to rise during Q3 2021, more than offsetting lower than expected asset returns, and leading to positive pension index results for all regions except the U.S.

Asset performance has moderated with plans in most regions exhibiting slightly negative returns this quarter. Only the Eurozone and Japan showed modest positive returns.

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that Global Pension Finance Watch captures results at the end of each quarter, we particularly want to highlight the point in time view of this publication in light of recent volatility. Willis Towers Watson 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 Willis Towers Watson experts.

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