Global pension accounting snapshot – 31 December 2025
Overview of the key issues for those involved in global defined benefit (DB) pension plan accounting.
Key trends over 2025
- Compared to the position at 31 December 2024, US corporate bond yields at 31 December 2025 are broadly unchanged, and UK and Eurozone corporate bond yields have seen an increase. Corporates are therefore likely to see an increase in their IAS19 discount rates for their UK and Eurozone pension liabilities, which will reduce the value of the corresponding defined benefit obligations.
- Despite significant volatility in the first half of 2025 due to US trade policies, equity markets experienced significant positive returns over the year in the major economies. Corporates with funded DB plans with growth-oriented investment strategies are likely to have seen an increase in their asset values as at 31 December 2025 compared to the position at 31 December 2024.
Discount rate assumptions and key local issues
The table below shows IAS19 discount rate assumption ranges at 31 December 2025 that we typically expect in major DB pension markets globally, as well as some of the key pension accounting issues in those countries.
|
Country |
Indicative IAS19 discount rate range |
Key issues in local market |
||
|
Short |
Medium |
Long |
||
|
Eurozone |
2.4% – 4.1% |
3.6% – 4.3% |
4.0% – 4.5% |
Netherlands: The new pension legislation (Wet Toekomst Pensioenen) could potentially impact balance sheet and P&L. |
|
UK |
4.9% – 5.5% |
5.4% – 5.8% |
5.6% – 5.9% |
The Virgin Media legal case may require further investigation and potential for additional disclosures. However, there is draft legislation pending which is intended to mitigate the impact. |
|
USA |
5.3% – 5.5% |
5.3% – 5.5% |
5.5% – 5.7% |
Pension risk transfer activity remained steady in 2025 with plan sponsors continuing to monitor both the evolving interest rate environment and market conditions as they consider de-risking opportunities. |
|
Canada |
4.2% – 4.6% |
4.6% – 5.0% |
5.0% – 5.2% |
No notable key issues currently in Canada. |
|
Mexico |
9.2% – 9.4% |
9.6% – 9.7% |
9.7% – 9.8% |
No notable key issues currently in Mexico. |
|
Norway |
4.2% – 4.4% |
4.1% – 4.4% |
3.8% – 4.1% |
No notable key issues currently in Norway. |
|
China |
1.3% – 1.8% |
1.9% – 2.2% |
2.3% – 2.7% |
No notable key issues currently in China. |
|
India |
5.5% – 6.7% |
6.8% – 7.2% |
7.2% – 7.6% |
No notable key issues currently in India. |
|
Indonesia |
5.0% – 6.2% |
6.3% – 6.6% |
6.6% – 7.0% |
No notable key issues currently in Indonesia. |
|
Malaysia |
3.5% – 3.9% |
4.0% – 4.2% |
4.3% – 5.2% |
No notable key issues currently in Malaysia. |
|
Singapore |
1.5% – 2.1% |
2.2% |
2.2% – 2.4% |
No notable key issues currently in Singapore. |
|
Thailand |
1.1% – 1.6% |
1.7% – 2.1% |
2.2% – 2.7% |
No notable key issues currently in Thailand. |
If you would like to discuss the above in further detail or would like insights for any other countries, please get in touch.
Movement in corporate bond yields
The chart below shows the change in the yields on AA-rated Sterling, US Dollar and Euro denominated corporate bonds over the year to 31 December 2025.
Since 31 December 2024, corporate bond yields in the US remained broadly unchanged however, there has been a c. 0.1% increase in corporate bond yields in the UK and a c. 0.6% increase in corporate bond yields in the Eurozone. Multinationals are likely to see a decrease in DB liability values in the UK and Eurozone compared to the position at 31 December 2024.
Growth asset performance
The chart below shows the performance of equity markets in the UK, US, Europe and Japan over the year to 31 December 2025.
Equity markets experienced significant positive returns over the year to 31 December 2025 in the major economies. There was significant volatility in the first half of 2025 driven by trade concerns as the US raised tariff rates to levels not seen in recent history. However, developed markets rallied in the second half of the year due to positive implications of fiscal and monetary policies. By the end of 2025, equity markets across the globe displayed cumulative positive returns of c. 28% in Europe, c. 25% in the UK, c. 10% in the USA and c. 17% in Japan for the year. Corporates with funded DB plans with growth-oriented investment strategies are likely to have seen an increase in their asset values as at 31 December 2025 compared to the position at 31 December 2024.
Contacts
Isabel Coles
Head of International Consulting, MBWL International
VIEW PROFILE
Email:
isabel.coles@mbwl-int.com
Tel: +44 20 3949 5710
Isabel Coles
Head of International Consulting, MBWL International
A multilingual expert in employee benefits for multinational corporates.
Isabel heads up MBWL International, advising multinational organisations on their employee benefits arrangements around the world, with a focus on corporate sales and purchases, accounting disclosures and the financing, risk management and design of benefit plans.
Her vast experience includes leading global accounting consolidations under international, UK and US accounting standards for multinational companies headquartered in the UK and overseas – with consolidations ranging in size from two to over 50 defined benefit plans.
She has advised both corporate and private equity buyers on the employee benefit considerations (including pension liabilities) associated with corporate sales and purchases in Europe and worldwide, from due diligence through to closing and subsequent integration work. Isabel has also undertaken many benefit audits and benchmarking exercises, including a 25-country audit for a company in the technology sector.
Other areas of Isabel’s expertise include reviewing and establishing international pension plans, advice on individual expatriate employee benefit packages and supporting multinationals in agreeing and implementing global governance approaches and policies for managing their employer benefit plans.
Isabel chairs the International Committee of the Association of Consulting Actuaries and is fluent in German and French.
Elliot Colman
Global Benefits Consultant
VIEW PROFILE
Email:
elliot.colman@mbwl-int.com
Tel: +44 (0) 20 3949 5711
Elliot Colman
Global Benefits Consultant
Elliot is a Global Benefits Consultant for MBWL and is based in London. He joins MBWL from PwC where he started his career over 7 years’ ago. He has experience working as both a corporate pensions actuary before moving into a M&A team specialising in global defined benefit plans.
He brings expertise in advising both large multinational companies and private equity firms on global defined benefit plans, equity plans, and other employee related issues over the course of a deals cycle, including buy-side and vendor due diligence and bespoke strategic advice for sale.
Elliot graduated from the University of Nottingham with a first-class degree in BSc (Hons) Financial Mathematics and is a Fellow of the Institute of Actuaries in the UK.
Contacts
Isabel Coles
Head of International Consulting, MBWL International
VIEW PROFILE
Email:
isabel.coles@mbwl-int.com
Tel: +44 20 3949 5710
Isabel Coles
Head of International Consulting, MBWL International
A multilingual expert in employee benefits for multinational corporates.
Isabel heads up MBWL International, advising multinational organisations on their employee benefits arrangements around the world, with a focus on corporate sales and purchases, accounting disclosures and the financing, risk management and design of benefit plans.
Her vast experience includes leading global accounting consolidations under international, UK and US accounting standards for multinational companies headquartered in the UK and overseas – with consolidations ranging in size from two to over 50 defined benefit plans.
She has advised both corporate and private equity buyers on the employee benefit considerations (including pension liabilities) associated with corporate sales and purchases in Europe and worldwide, from due diligence through to closing and subsequent integration work. Isabel has also undertaken many benefit audits and benchmarking exercises, including a 25-country audit for a company in the technology sector.
Other areas of Isabel’s expertise include reviewing and establishing international pension plans, advice on individual expatriate employee benefit packages and supporting multinationals in agreeing and implementing global governance approaches and policies for managing their employer benefit plans.
Isabel chairs the International Committee of the Association of Consulting Actuaries and is fluent in German and French.
Elliot Colman
Global Benefits Consultant
VIEW PROFILE
Email:
elliot.colman@mbwl-int.com
Tel: +44 (0) 20 3949 5711
Elliot Colman
Global Benefits Consultant
Elliot is a Global Benefits Consultant for MBWL and is based in London. He joins MBWL from PwC where he started his career over 7 years’ ago. He has experience working as both a corporate pensions actuary before moving into a M&A team specialising in global defined benefit plans.
He brings expertise in advising both large multinational companies and private equity firms on global defined benefit plans, equity plans, and other employee related issues over the course of a deals cycle, including buy-side and vendor due diligence and bespoke strategic advice for sale.
Elliot graduated from the University of Nottingham with a first-class degree in BSc (Hons) Financial Mathematics and is a Fellow of the Institute of Actuaries in the UK.