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Article | Global Pension Finance Watch

Global Pension Finance Watch: Third quarter 2020

Improved Third Quarter Index Results

Investments|Retirement|Pensions Risk Solutions
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By Nathan Pavlik and David Finn | October 27, 2020

Improvements in the global financial markets during Q3 2020 drove positive third quarter pension index results for most regions.

Positive asset performance was either partially or completely offset by decreasing discount rates in all regions with the exception of Switzerland. The overall impact of these changes resulted in positive pension index returns over the third quarter in North America and Japan. Europe was relatively flat and Brazil saw a slight decrease over the 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 during 2020. 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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