WTW Global Pension Finance Watch Q2 2025: US Leads with Strong Pension Fund Growth

The Global Pension Finance Watch report for Q2 2025 from WTW reveals mixed performance in pension fund indices across major markets. The United States led quarterly growth with a 6.1% increase, driven by a robust 7.0% rise in its benchmark portfolio, supported by strong equity returns both domestically (10.5%) and internationally (11.7%). Liabilities in the U.S. edged up slightly by 0.7%, influenced by a marginal increase in discount rates to 5.71%. Over the past 12 months, the U.S. pension index has grown by 7.2%, reflecting overall positive market conditions and effective asset-liability management in the pension sector.

Japan showed solid improvement with a 4.7% gain mainly attributed to strong equity returns in both domestic and international markets (7.6% and 7.8% respectively). Benchmark discount rates increased by 23 basis points to 3.00%, which helped reduce liabilities by 2.6%. The country's 12-month performance stood at a 5.2% gain, emphasizing steady recovery and favorable market trends in pension finance.

Canada followed with a 2.7% quarterly increase, underpinned by domestic and international equity gains of 8.5% and 5.5%. The increase in benchmark discount rates to 4.88% lowered liabilities by 1.3%. Meanwhile, the Eurozone posted a modest 0.4% gain driven by asset gains of 2.2% that were offset by a 1.8% rise in liabilities due to lower discount rates.

Key declines were observed in Switzerland and the UK, with decreases of 1.1% and 1.4% respectively. Switzerland's stagnant asset performance combined with a 1.0% rise in liabilities contributed to its downturn. The UK faced a 1.9% asset gain, but liabilities increased significantly by 3.4% amidst reduced discount rates. Brazil experienced the largest quarterly drop at 2.2%, where a significant 8.3% rise in liabilities, caused by a 45 basis-point decline in discount rates, outweighed a 5.9% asset gain.

On a year-over-year basis, gains were observed across most markets, with Brazil leading at 5.9% growth, followed closely by the Eurozone at 5.6%. Switzerland was the sole market to record a year-long decline, slipping 0.5%. These trends underscore the importance of discount rate movements and equity market performance in influencing pension fund valuations globally. For U.S. and international pension managers, the data highlights ongoing challenges and opportunities in balancing asset growth against liability fluctuations under varying interest rate environments.