US - The California State Teachers' Retirement Fund (CalSTRS) has reportedly issued a stark warning to trustees: be prepared for the possibility of challenging times in 2007- 08.
In a report said to have been dispatched to trustees last week, officials observed they had never seen so much global wealth chasing so few investment opportunities.
As a result, this means this year and next could be among the most challenging times since 2001, officials reportedly said.
The stormy outlook comes after the US$171.1bn pension fund is reportedly set to fall US$19.6bn short of its funding liabilities over the next 30 years, despite three good annual returns.
Global Pensions recently reported the $19.6bn shortfall was highlighted in a study by Milliman actuarial consultants which was said to have claimed members would need to boost contributions by 3.3%.
While returns from real estate investments are expected to come in at around 30% for 2006-2007, Christopher Ailman, chief investment officer at CalSTRS, cautioned trustees about expecting double-digit gains in future, according to reports.
An airstrike in Iran, a US recession, an outbreak of bird flu and tension between China and Taiwan could hammer global financial markets, said Ailman.
Despite this, Ailman reportedly said CalSTRS continued to be on a growth track and predicted the fund could reach $250bn within the next five years.
This week's top stories included Cardano announcing plans to acquire Now Pensions from a Dutch pension fund later this year.
Royal Bank of Scotland (RBS) faces a £102m impact on liabilities as a result of equalising guaranteed minimum pensions (GMPs), according to its annual results.
Malcolm Mclean says getting the channels of communication right and engaging more openly is a good starting point