Global pension funds lose $5 Trillion in 2008

By siliconindia   |   Tuesday, 27 January 2009, 23:31 IST   |    3 Comments
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Global pension funds lose $5 Trillion in 2008
Bangalore: The unstable market conditions coupled with a lower government bond yields have caused a loss of five trillion dollar for the global pension fund assets during 2008. As per a Watson Wyatt report, global pension assets were declined by 19 percent to $20 trillion from $25 trillion. A lower government bond yields has pushed pension liabilities further up. The report said that all countries except Germany in 2008 saw significant negative growth in pension assets. Germany was protected by its high allocation to bonds. United States, Japan and the United Kingdom remained the largest pension markets in the world, accounting for 61 percent, 13 percent and 9 percent respectively of total pension global fund assets. Equity allocation in the seven most-developed pension markets, which include the United Kingdom, the Netherlands and the United States, fell to 42 percent from 51 percent in the five years to 2008. "The pensions system is being tested on every level," said Roger Urwin, global head of investment content at Watson Wyatt. "Most notable in 2008 were the impacts of credit and collateral risk on the pension funds, as well as greater issues around liquidity and volatility," added Urwin.