Worst Decline in 30 Years for the Largest U.S. Retirement Funds

CHICAGO, Jan. 26 /PRNewswire/ -- U.S. retirement funds lost almost $1
trillion of their value in the year ended Sept. 30, 2008, the worst decline in
the 30 years Pensions & Investments has tracked the largest 1,000 plans.
The decline is due to largely disastrous returns from equity markets,
noted Nancy K. Webman, editor. Domestic equities, as represented by the
Russell 3,000 index, fell 23.1% for the year ended Sept. 30. International
equities performed even more poorly, with the Morgan Stanley Capital
International Europe Australasia Far East index returning -32.5%.
The fourth quarter of 2008 made it worse: P&I estimates assets of the
plans fell an additional $754 billion, or 11.8%. That puts the total loss at
$1.7 trillion, or 23.3%, for the 15 months ended Dec. 31. The results of the
survey will be published in the Jan. 26 issue of Pensions & Investments, the
international newspaper of money management. The results are based on
responses to detailed surveys sent to executives at corporate, public and
union retirement plans. Statistics are compiled on both defined benefit and
defined contribution - such as 401(k) - plans at each institution.
The bad news:
-- Aggregate assets of the 1,000 largest U.S. retirement plans dropped
$965 billion, or 13.1%, to $6.4 trillion as of Sept. 30, from the prior year.
-- Assets of P&I's top 200 funds declined 15.9% to $4.7 trillion as of
Sept. 30, also the worst in the past 30 years.
-- Aggregate defined benefit plan assets among the top 200 dropped 16.5%
to $3.7 trillion in the year ended Sept. 30, the worst in the 20 years for
which P&I has tracked the breakdown between defined benefit and defined
contribution plans.
-- Defined contribution plan assets of the top 200 also declined, but by a
slightly more palatable 13.7%, or $164 billion.
Since 1979, there were only two other years in which P&I's data showed a
decrease in the assets of the 1,000 largest funds: In 2001, assets dropped
12.7% from the prior year's survey and in 2002 assets dropped 9.7%.
Kevin P. Quirk, founding partner and principal of industry researcher Casey
Quirk & Associates LLC, said the death march that the corporate defined
benefit plan is on is reflected in P&I's survey data. (Defined benefit plans
promise participants benefit payment at retirement.)
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SOURCE Pensions & Investments

Nancy K. Webman, Editor, +1-312-649-5284, +1-312-590-5955 (mobile),
nwebman@crain.com, for Pensions & Investments