GLOBAL - Pension fund assets are still below pre-crisis levels despite improvements, research by the Organisation for Economic Co-operation and Development (OECD) has revealed.
It said rebounding equity prices last year helped pension funds in OECD countries recoup around US$1.5trn of the $3.5trn in market value they lost in 2008, although assets remain about 9% below December 2007 levels.
Some countries had already recuperated completely from the 2008 losses however, including Austria, Chile, Hungary, Iceland, New Zealand, Norway, and Poland.
The OECD weighted average asset-to-GDP ratio for pension funds increased from 60.3% of GDP in 2008 to 67.1% of GDP in 2009, with the Netherlands improving by a record 17.1pp jump in the value of its assets in the last year, equivalent to a gain of $48bn, from $979bn to over $1trn.
The report added: "Despite these positive outcomes, funding levels for pension funds were still significantly lower at the end of 2009 than two years previously. The median funding deficit (the gap between assets and liabilities) was 26% at the end of last year, compared with 23% a year earlier and 13% in 2007. Decreasing bond yields (which are used to calculate liabilities) in many countries meant that liabilities went up, offsetting the investment recovery."
Public funds have also recouped losses because of a more conservative investment strategy, the OECD said. Assets in public pension reserve funds across OECD nations were $4.5trn, a 7.3% increase from the end of 2008.
Bills and bonds were the most dominant securities held in funds, accounting for about 40% of total assets in the countries for which the data was available, it said.
The People's Pension, Atlas Master Trust and The Cheviot Trust have been granted authorisation from The Pensions Regulator (TPR), taking the total number of authorised master trusts to 18.
Pension schemes have been warned they may now face a more challenging legal test if they wish to fix drafting errors.
The Greene King Pension Scheme has appointed XPS Pensions as its actuarial and investment adviser following a competitive tender process.
Professional Pensions has compiled a list charting the progress of master trust authorisation. View our list in full here...