Portuguese pension funds had an estimated return of -1.2% in August, based on estimates of profitability. These returns are the lowest since January, Mercer said.

Nuno Silva, associate at Mercer, said: "August was the worst month in 2011 for the Portuguese pension market as it recorded the lowest yield since January. The poor performance was explained by the sharp fall in North American and European stocks as a result of uncertainty in the future of the sovereign debt crisis and the absence of signs of economic recovery."

Similar to what happened in the last three months the negative return in August was due to the negative returns on equities, which was much higher than the positive contribution of fixed-rate bonds. The market performance was marked by the downward revision of U.S. credit rating by S&P, while in Europe the discussion now focuses on the difficulty in resolving the situation in Spain and Italy, Mercer said.

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