Global pension accounting snapshot – 30 June 2026
Key trends over Q2 2026
- AA-rated have decreased over the quarter to 30 June 2026 in the UK and the Eurozone. Corporates are therefore likely to see a decrease in their IAS19 discount rates for their pension liabilities in these regions, which will increase the value of the corresponding defined benefit obligations.
- Global equity markets rebounded strongly over the quarter to 30 June 2026, with investor sentiment improving following the volatility experienced at the end of the previous quarter. Equity markets rose steadily through April and May with the US, Japan and Europe delivering double digit returns by the quarter end. Corporates with funded DB plans and growth-oriented investment strategies are therefore likely to have seen a material increase in asset values as at 30 June 2026 compared to 31 March 2026.
Discount rate assumptions and key local issues
The table below shows IAS19 discount rate assumption ranges at 30 June 2026 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 |
2.8% – 4.0% |
3.7% – 4.4% |
4.0% – 4.6% |
Netherlands: The new pension legislation (Wet Toekomst Pensioenen) could potentially impact balance sheet and P&L. |
|
UK |
5.3% – 5.9% |
5.8% – 6.2% |
6.0% – 6.5% |
The Pension Schemes Act 2026 was passed into law and received Royal Ascent on 29 April 2026. The act allows schemes affected by the Virgin Media legal case to obtain retrospective actuarial confirmation that historical benefit changes in scope of section 37 were valid. |
|
USA |
4.9% – 5.6% |
5.4% – 5.8% |
5.6% – 5.9% |
Pension risk transfer activity continues at a steady pace, with plan sponsors maintaining a focus on de-risking strategies. Market participants report ongoing interest in annuity buy-ins and buy-outs, as favourable pricing and robust insurer capacity persists. |
|
Canada |
4.2% – 4.5% |
4.5% – 4.9% |
4.9% – 5.2% |
New mortality tables (CPM2024) were released in March 2026. The combined impact of using the new mortality tables and the latest mortality improvement improvements scales (CanMI-2024) is estimated to increase liabilities and current service costs by c. 2% to c. 3%. |
|
Mexico |
9.0% – 9.5% |
9.7% – 9.8% |
9.8% – 9.9% |
No notable key issues currently in Mexico. |
|
China |
1.1% – 1.7% |
1.8% – 2.1% |
2.2% – 2.6% |
No notable key issues currently in China. |
|
India |
5.6% – 6.7% |
6.8% – 7.1% |
7.1% – 7.9% |
Changes in the Labour Code may increase wages for determining the gratuity benefit. The change may result in a past service cost under IAS19 on application in 2026. |
|
Indonesia |
7.0% – 7.2% |
7.3% |
7.3% |
No notable key issues currently in Indonesia. |
|
Malaysia |
3.6% – 4.0% |
4.1% – 4.3% |
4.3% – 4.7% |
No notable key issues currently in Malaysia. |
|
Philippines |
5.9% – 6.9% |
6.9% |
7.0% |
No notable key issues currently in Philippines. |
|
Singapore |
1.5% – 2.0% |
2.0% – 2.1% |
2.1% – 2.2% |
No notable key issues currently in Singapore. |
|
South Korea |
3.9% – 5.1% |
5.2% – 5.8% |
6.2% |
No notable key issues currently in South Korea. |
|
Thailand |
1.0% – 2.0% |
|
|
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 AA-rated 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 quarter to 30 June 2026.
Since 31 March 2026, AA-rated corporate bond yields have decreased across the UK and the Eurozone by c. 0.1% while the US AA-rated corporate bonds yields have remained broadly the same over the quarter. Multinationals are therefore likely to see an increase in DB liability values across the UK and the Eurozone.
Growth asset performance
The chart below shows the performance of equity markets in the UK, US, Europe and Japan over the quarter to 30 June 2026.
Global equity markets delivered strong positive returns over the second quarter of 2026, recovering from the heightened geopolitical uncertainty experienced at the end of the previous quarter. Markets rallied through April and May, supported by improving investor sentiment, easing concerns around energy supply disruption and a stabilisation in inflation expectations. Although some short-term volatility persisted during June, global equities generally maintained upward momentum.
The US was the strongest performing region, delivering returns of c. 14% over the quarter. Japanese and European equities also performed strongly, both generating returns of c. 13%. The UK market didn’t perform as strongly as other developed markets but still posted positive returns of c. 5%.
Corporates with funded DB pension plans and growth-oriented investment strategies are therefore likely to have seen a material increase in asset values as at 30 June 2026 compared to 31 March 2026.
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.