Global corporate pensions battle growing pension deficits


New data issued by Mercer shows a growing pension crisis in Europe with defined benefit pensions still causing a significant dilution of European multinational company earnings, while US corporate pensions saw their pension deficits increase by nearly $150 billion in July to a record $689 billion.

European multinational pension plans are now larger relative to market capitalisation than in 2006, the consulting firm says. Pension deficits account for 4.8% of market value of these companies, as pension costs represent 1% of earnings of companies in the Dow Jones Euro-stoxx 600 in 2010/2011 with no improvement in pension funding