Defined benefit plans in major countries around the world sustained declines in their funded status during the third quarter, mainly from rising oil prices and concern over economic growth, according to a report issued today by Towers Perrin. The only exceptions were Australia and Brazil, where funded status remained unchanged and increased 4%, respectively.
The report found that investment returns overall were mixed as rising oil prices and Middle East volatility dampened global economic growth expectations. Oil prices also hit bond markets, where longer duration bond yields fell. That increased returns on fixed-income investments but negatively affected plan liabilities because benchmark discount rates were generally lower, according to the report.
