GLOBAL - The average assets to gross domestic product ratio for OECD pension funds dropped from 75.5% of GDP in 2007 to 63.4% in 2008, according to the Organisation for Economic Co-operation and Development.
Latest figures from the international body show that the US experienced a record 24.2% decline in the value of assets in the last year, amounting to a loss of US$2.6tn.
Conversely, only three countries showed asset to GDP ratios higher than 100%, including Switzerland with 119%, the Netherlands with 113% and Iceland with 113%.
The data reveals the importance of pension funds relative to the economy in OECD countries. Pensioners in countries with a higher ratio of assets to GDP "can rely to a large extent on income from pension funds," said OECD administrator of pension and insurance statistics Jean-Marc Salou.
It showed that Australia is fourth following Iceland, with 91.8% while the UK is fifth with 78.9%. These figures are above the total OECD figure at 63.4%, which represents the OECD average assets as a percentage of GDP.
Greece had the worst ratio at 0%, while France and Luxembourg had ratios at 1.1%, below Turkey at 1.7%.
The report also highlighted that between 2007 and 2008, investment in equities on average in the OECD sector fell by 8.8 percentage points, declining from 49.9% in 2007 to 41.1% in 2008.
However, this decrease was well above the OECD average for some countries including Denmark, where this dropped by 21.8 percentage points, and Ireland, where equity investment decreased by 14 percentage points.
It showed that bonds and equities remain the two most important asset classes, both representing over 70% of total portfolio in 2008.
Nonetheless, the weighting to equities and bonds varies across OECD countries. While there is typically a preference for bonds, certain countries reverse this proportion. Finland, for example, has an allocation to equities which outweighs bonds by 46.8% to 39.9%, Ireland by 66.3% to 18.5% and the US by 43.2% to 31.5%.
It said that many countries' bond holdings comprise a significant share of public sector bonds rather than corporate bonds. Poland's total bond holdings, for example, consist of 96.7% in public sector bonds, while Hungary has 92.6% and Italy 82%.
The Pensions Regulator (TPR) and Labour MP Stephen Kinnock and will listen to the experiences of steelworkers when transferring their pensions away from the British Steel Pension Scheme (BSPS) next week in Port Talbot.
Just Group has acquired a 75% stake in the holding company of Corinthian Pension Consulting in a bid to strengthen its professional defined benefit (DB) advisory services.
The Pensions Regulator (TPR) has exercised its production order power under the Proceeds of Crime Act 2002 for the very first time as part of a fraud investigation.
The ITN Limited Pension Scheme has named Trafalgar House as its administrator for an initial term of five years.