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CHART CENTRAL

Corporate plan return expectations slide again

Expected returns declined among corporate pension plans in seven major economies observed by Willis Towers Watson. The U.S., Canada and the U.K have the highest average return assumptions; the latter two remain above 5%, while companies in the U.S. maintain assumptions around 6.7%. Swiss companies have the lowest assumed return at 2.3%, which declined 0.3 percentage points from 2016. Dutch companies saw the sharpest decline of about 0.7 percentage points.

WTW observed a more conservative stance among the companies tracked, likely driven by the growing number of liability-driven investment strategies among corporate pension plans, which would contribute to lower return assumptions. Low yields and declining equity return expectations also contributed to drops in return assumptions.

Inflation expectations were lower across six of the seven countries, with only the U.K. expected to see a rise in prices.