U.S. pension funds, aided by strong equity and bond returns and a declining dollar, returned 19.6% in 2009, outperforming their peers in the world’s seven largest markets. Strong equity markets lifted pension fund returns worldwide into double digits, a major about-face from 2008 when real returns sank as low as -27%. U.S. plans lost an average 25.2% in 2008. Pension fund returns in the U.K. rose 14.5% in 2009, in part because of a falling pound boosting international investment returns. U.K. plan returns sank 13.1% in 2008.
Currency movements went the other way in commodities-rich countries like Australia and Canada in 2009. Aussie investors returned an average 14%, after the Australian dollar soared against most major currencies. The real return in 2008, which included a 5% bump in inflation, was -27%. Canadian pension funds were up 13.8% last year, after losing 14.7% in 2008. Pension fund returns in the Netherlands, Switzerland and Japan rose 13.2%, 10.8% and 9.5% in 2009, respectively. Dutch funds were up from a -16.6% return in 2008, when Swiss funds returned -13.3% and Japan, -21.2%.
