Declining discount rates and disappointing asset returns caused pension funding levels in major global markets to drop in 2011.
Although the fourth quarter of 2011 experienced generally positive asset returns, the beneficial impact was largely offset by continuing declines in discount rates, according to Towers Watson's latest Pension Index.
As a result, overall movements in the Pension Index for the fourth quarter of 2011 were relatively small and mixed, ranging from a fall of 2.7 percent in the United Kingdom to a 4.4 percent increase in the United States. The Towers Watson Pension Index is a measure of funded ratio-based on the projected benefit obligation for a benchmark pension plan. The Pension Index is tracked across seven markets: Brazil, Canada, the Euro-zone, Japan, Switzerland, the United Kingdom and the United States.
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