Reuters

Propelled by rising stocks and an increase in the yields of long Aa corporate bonds, the funded status of the typical U.S. corporate pension plan in December increased 3.0 percentage points to 85.5 percent, the best funding ratio during the entire year, according to monthly figures published by BNY Mellon Asset Management.

Assets for the typical U.S. corporate pension plan rose 0.9 percent and liabilities declined 2.6 percent for the month, as reported by the BNY Mellon Pension Summary Report for December 2009. For the year through December 31, 2009, BNY Mellon reports the funding ratio for the typical U.S. corporate pension plan is up 11.6 percentage points.

  BNY Mellon

UK pension funds saw average returns of 14 per cent in 2009, estimates released by BNY Mellon Asset Servicing have revealed. According to the figures, these are the best pension fund returns since 2005, with an estimated real return of 14.9 per cent when measured against RPI inflation for 2009. The estimates also reveal that pension funds have made gains over the three year period to December 31 2009, with an estimated average return of 1.7 per cent per annum. Overall, UK equities posted returns of 30.1 per cent during 2009, while Bonds and UK bonds showing negative returns.

Fair Investment

The cover ratio of Dutch pension funds improved by an average seven percentage points to 109% during the third quarter of 2009, according to pensions regulator De Nederlandsche Bank (DNB). Industry-wide schemes and companies pension funds recovered to an average cover ratio of 107% and 116% respectively, while occupational schemes for professionals, such as notaries and medical consultants, reached a funding ratio of 121%, DNB’s newest statistics revealed.

  IPE

Im Kampf gegen die rekordniedrigen Zinsen am Kapitalmarkt erwägen die deutschen Pensionskassen einen Befreiungsschlag. Überlegt wird, riskantere Anlagen zu wagen, um eine höhere Rendite zu ermöglichen - und die Arbeitnehmer am Risiko zu beteiligen. "Wenn man das System der betrieblichen Altersversorgung mit angemessener Verzinsung aufrechterhalten will, sollte man die Marktrisiken zwischen Arbeitgeber und Arbeitnehmer teilen", sagte Peter Hadasch, Vorsitzender des Verbandes der Firmenpensionskassen laut Financial Times Deutschland.

Martina Perreng, Referatsleiterin Individualarbeitsrecht beim Deutschen Gewerkschaftsbund, kritisierte den Vorstoß: "Wenn der Arbeitnehmer auf Entgelt verzichtet und das in die Pensionskasse gibt, darf es sich nicht um Risikokapital handeln", sagte sie. An den geleisteten Rentenzusagen wird sich ohnehin kaum etwas ändern lassen. "In bestehende Rentenverpflichtungen einzugreifen, halte ich für sehr schwierig", sagte Stefan Oecking, Leiter International der Beratungsgesellschaft Mercer.

  FTD

Although it has received little coverage lately, a bombshell of a lawsuit inching its way through the superior court of Alaska has revealed the financial strain visited on state workers there and promises to have ramifications for public pensions across the country.

Mercer, the agency contends, made multiple errors as the state’s actuarial consultant when it estimated the amounts that two of the state’s retirement plans needed to set aside for health care and pension benefits. The agency seeks damages of $2.8 billion.

The error that Mercer covered up, according to the lawsuit, occurred in 2002 and involved a “per capita claims cost,” which represented the estimated expenses of providing health care to a retiree. Mercer used one assumption for retirees under age 65 and another, lower estimate for those over 65 because they could tap into Medicare benefits.

But the amount entered into Mercer’s computers for employees of pre-retirement age was $213 less than it should have been. The error understated the amount of liabilities owed by one of the Alaska funds by 10 percent. A Mercer actuary found the error before the 2002 valuations were to be presented to the Alaska plans and reported it, along with a colleague, to a supervisor. But after several discussions, the lawsuit says, the Mercer executives decided not to tell their client about the error.

  New York Times

Many more pension schemes will close in the next five years, to both new and existing members, a report has said. Just 23% of final-salary pension schemes in the private sector are still open to new joiners, the National Association of Pension Funds also said. A year ago the figure stood at 28% but since then more schemes have closed, both to new members and existing ones. The NAPF said the drop in the number of schemes that were still open was greater than in the previous two years.

  BBC News