A survey of private and 'public' US pension funds has found that the problems associated with mainta...
A survey of private and 'public' US pension funds has found that the problems associated with maintaining benefits payments is likely to remain over the longer term even if US and international stock markets recover from the current downturn, according to consultant Mercer.
The problem stems from the sheer number of people expected to retire as the baby-boomer generation hits 60-plus, which has already pushed many company pension funds to become worth more than the companies paying into them.
As the size difference increases and the number of people expecting benefits payments each month increases, it is going to remain harder than ever to maintain sufficient reserves, Mercer says.
Stock markets will recover eventually, but fund mangers should take a longer-term view of the benefits of this recovery rather than just trying to apply short-term asset changes.
Mercer says pension plan 'sponsors' are looking to adjust the balance between passively and actively managed funds in favour of the latter after evidence that "active managers continue to add value in a difficult environment".
Partner Insight: For Blackfinch, the arrival of its IHT portfolio services was a 'natural evolution' in the group's offering and points to an established track record of returning cash to investors.
Senior Managers Regime
Interest rate outlook unchaged
FCA made demands last week