US - Pension funds have lost over $1trn since the credit crunch began just over a year ago, a congressional committee has been told.
The CBO estimated private sector defined benefit (DB) plans had lost 15% of their value over the course of the year, while changes in discount rates had led to a decrease in assets net of liabilities of as much as 5-10%.
Defined contribution (DC) and 401(k) plans were also adversely affected, since assets were more heavily weighted to equities. The CBO estimated the total decline in DC plan values to be "slightly more" than that of DB plans.
Public sector schemes lost over $300bn in the space of the year, exacerbating low funding ratios. It was reported the true funding status may be even worse, as some analysts had questioned the use of relative high discount rates to calculate future liabilities.
The CBO said the 20 largest plans, which accounted for about half of all public pension fund assets, had funding ratios above 90% but were not immune to economic hardships. Over the year, the California Public Employees Retirement System (CalPERS) saw the value of its assets fall from $245bn to $206bn.
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