In the U.S., favorable returns and a 20 basis point increase in the benchmark discount rate combined to push its Pension Index rating up from 70.7 at the end of December to 73.9 at the end of March. Investment returns were 3.7% and liability values were down 1% in the first quarter, according to Towers Watson’s Global Pension Finance Watch report.
For Brazil, the Pension Index increased from 103.2 to 107.5. Brazil saw a 2.1% investment return in the first quarter and a 2% decrease in liability values.
In Canada, there was an increase of the liability discount rate of 14 basis points, which along with positive returns, led to an Index increase from 68.1 to 70.1 over the quarter. Investment returns were 2.3% and liability values were down 0.7%.
With a 32 basis point increase in the benchmark discount rate, Japan’s Index score increased from 53 to 55.3 for the quarter. Japan saw a 1% investment return in the first quarter and a 3.9% decrease in liability values.
The largest Index increase was for the Euro-Zone (see Euro Zone Sees Largest Increase in Towers Watson Pension Index).The Global Pension Finance Watch report is at http://www.towerswatson.com/assets/pdf/4440/Q1_GPFW_2011.pdf.