Recent funding decisions by some pension funds are sending confusing messages about pensions funding needs when compared with moves to maintain pensions assets in turbulent investment markets, suggest European asset managers and pensions consultants.
Hewitt Associates today noted UK pension funds have seen major losses through yesterday’s global stock market falls, and put them “right back where they started in 2007”. The 5.3% fall in the FTSE All-Share index combined with drops in other global markets saw the surplus on the FTSE100 pension schemes swing from £9.4bn (€12.65bn) on Monday 21 January to a deficit of £4.6bn yesterday - a swing of £14bn and a shift from 102.8% funded on Monday to being just 98.6% funded today.
Worries about the prospect of a US recession sent equity indices plummeting yesterday and dragged MSCI indices to an even lower start for the year, as investors are concerned any recession in the US will impact all corporate profit potential.
Statistics provided by MSCI Barra reveal investors in equities have had a tough start to the year and will need to see a significant shift upwards in share prices in order to return to the positions held at the start of the year. By close of business yesterday (January 21), the MSCI World index was down 12.18% year-to-date (YTD), while the MSCI Europe index was down 16.04% and the MSCI Pacific ex Japan has dropped 13.78% over the same period. Nordic indices have suffered particularly heavily, as the MSCI Norway index had dropped 25% and the Finland index was down 20% YTD.
This contrasts, however, with activity seen within the last week by BP and Shell which has enacted employer covenant plans to take contribution holidays, based on decisions and data gathered last year.
© IPE International Publishers Ltd.
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article