The funded status of pension plans worldwide was relatively unchanged in the second quarter, as negative returns in equity markets offset higher yields on longer-term bonds, lowering plan liabilities, according to a Towers Perrin analysis of the effect of global capital market performance on benchmark pension plans.
Brazilian benchmark pension plans had the best performance in the period ended June 30; their funded status, based on projected benefit obligations, rose three percentage points to 103%. It is also the only market in the group whose benchmark pension plans were overfunded on a PBO basis.
The PBO funded status of benchmark plans rose two percentage points to 88% in the Netherlands and Belgium — used as proxies for the eurozone countries — and one percentage point to 89% in the United States But the PBO funded status fell two percentage points to 84% in the United Kingdom; two percentage points to 94% in Australia; and one point, to 75%, in Canada. The Japanese funded status was unchanged at 77%.
The benchmark pension plans are intended to represent pension liabilities and asset mixes typically found in each country of the group.