Pension Funds Slammed by Market Downturn

by admin on 02/07/09 at 10:49 am

Countries whose pension funds were heavily invested in the stock market have suffered the greatest losses, according to a new report by Organization for Economic Cooperation and Development. This probably comes as little surprise to you if you have been checking your 401k plan.

Overall, the unweighted average among pension funds around the world was a decline of -23%. But some countries fared much worse than others.

English-speaking countries were particularly hard hit because stocks make up a majority of pension fund portfolios in countries like the U.S., Ireland, Britain, and Australia. As you can see by this chart from OECD, those were precisely the countries that fared the worst:

In contrast, countries like Germany and Mexico did better because pension funds in those nations had a much lower percentage of equities in their portfolios.