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Global Pension Finance Watch: First quarter 2020

Negative start to 2020 for global pension plans

Investments|Retirement
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By Nathan Pavlik and David Finn | April 28, 2020

Extreme market volatility and poor equity returns in the face of the COVID-19 pandemic dominated the story of global financial markets during Q1 2020.

The negative asset performance was only partially offset by increasing discount rates moderating the liabilities in some locations (Brazil, Canada, Switzerland and the U.K.), while decreasing discount rates drove the liability values up in the remaining regions (Eurozone, Japan and the U.S.). The overall impact of these changes resulted in negative pension index returns over the first quarter in all global regions with the exception of Brazil and the U.K.

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that Global Pension Finance Watch captures results at the end of each quarter, we particularly want to highlight the point in time view of this publication in light of recent market volatility. Willis Towers Watson supports the daily monitoring of pension funded status and other key 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 based on such factors as liability characteristics, contribution policy, portfolio composition and management strategy.

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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