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What’s happening: As people live longer, national pension systems need more money to pay for extended retirements. However, across the developed world, the number of individuals working and paying into these systems is stagnating or even shrinking, and pension managers are struggling to make up the difference.

In the Netherlands, the Future Pensions Act was passed and will become law on July 1, 2023. The new system will make it easier for pension funds to increase payouts when investments do well and to lower them when markets fall.

• According to Frank Driessen, CEO of Wealth Solutions for Aon Netherlands, “We believe that the transition to the new system is a step forward. Although there are still questions about parts of the legislation, the new [law] is better suited to this time and the changed society. The new law offers employers the scope to give their employees more control over the details of the terms of employment, salary and pension.” Read more in Aon’s press release and European Pensions.

In North America, Aon’s Pension Risk Tracker allows users to track the daily funded status for S&P 500 companies with defined benefit pension plans.

• In the U.S., pension asset returns were down throughout May 2023, ending the month with a negative 1.3 percent return. According to Aon, “Given a majority of the plans in the U.S. are still exposed to interest rate risk, the increase in pension liability caused by decreasing interest rates offset the positive effect of asset returns on the funded status of the plan.” Read more in PLANSPONSOR.
• Canadian defined benefit pension plans reported strong Q1 2023 results. As of March 31, 2023, pension assets gained 5.1 percent over Q1. According to Erwan Pirou, Canada chief investment officer at Aon, “Many pension plans are looking at ways to protect the current good financial position with de-risking or hibernation strategies as well as pension risk transfer activities.” Read more on key findings from Q1 in Canada here and in Benefits Canada.