Friday, January 09, 2009
[IWS] Mercer: CANADIAN PENSION PLANS PUMMELLED IN 2008 [8 January 2009]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Mercer
Canadian Pension Plans Pummelled in 2008 [8 January 2009]
http://www.mercer.com/summary.htm?idContent=1332340
Canada
Toronto, ON, 8 January 2009
The financial health of Canadian pension plans plummeted in 2008, as stock markets and interest rates declined sharply. The Mercer Pension Health Index fell to 59%, down 23% from the beginning of the year.
"Most equity markets fell by more than 30% last year in local currency," said Yvan Breton, Business Leader for Mercer's investment consulting business in Canada. "Even for plans that benefited from the fall in the Canadian dollar because they did not hedge foreign currency exposure, pension fund assets were hit hard in 2008."
"Pension plans experienced substantial losses on both sides of the balance sheet, with lower long-tem interest rates increasing liabilities," said Paul Forestell, Retirement Professional Leader at Mercer. "The new rules for determining the lump sum value of pension entitlements, which many jurisdictions will allow to be used early for 2008 year-end solvency valuations, will only partially mitigate the losses, reducing liabilities generally by only a few percent."
"Strangely enough, for many plans, corporate financial statements at year-end 2008 will show gains in pension plan funded status over the year, despite the investment losses. As credit spreads have widened, rising corporate bond yields will result in lower disclosed pension obligations at year end," noted Forestell.
AND MORE...including CHART.....
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Mercer
Canadian Pension Plans Pummelled in 2008 [8 January 2009]
http://www.mercer.com/summary.htm?idContent=1332340
Canada
Toronto, ON, 8 January 2009
The financial health of Canadian pension plans plummeted in 2008, as stock markets and interest rates declined sharply. The Mercer Pension Health Index fell to 59%, down 23% from the beginning of the year.
"Most equity markets fell by more than 30% last year in local currency," said Yvan Breton, Business Leader for Mercer's investment consulting business in Canada. "Even for plans that benefited from the fall in the Canadian dollar because they did not hedge foreign currency exposure, pension fund assets were hit hard in 2008."
"Pension plans experienced substantial losses on both sides of the balance sheet, with lower long-tem interest rates increasing liabilities," said Paul Forestell, Retirement Professional Leader at Mercer. "The new rules for determining the lump sum value of pension entitlements, which many jurisdictions will allow to be used early for 2008 year-end solvency valuations, will only partially mitigate the losses, reducing liabilities generally by only a few percent."
"Strangely enough, for many plans, corporate financial statements at year-end 2008 will show gains in pension plan funded status over the year, despite the investment losses. As credit spreads have widened, rising corporate bond yields will result in lower disclosed pension obligations at year end," noted Forestell.
AND MORE...including CHART.....
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 5:50 AM
