UK Pensions

Pensions funds recouping some of 2008 losses

PARIS (Reuters) - Pension funds tracked by the OECD recovered $1.5 trillion (918 billion pounds) in the first half of 2009 of the $5.4 trillion they lost in market value last year, the Organisation for Economic Co-operation and Development said on Monday.

A tourist guide shows an PMN anti-personnel mine used at the former East German border to tourists during a tour in the village of Moedlareuth, about 300 kilometres (186 miles) south of Berlin, July 24, 2009. REUTERS/Fabrizio Bensch

“The recovery in pension fund performance has continued through September 30, 2009, on the back of strong equity returns, but it will be some time before the 2008 losses are fully recouped,” the Paris-based agency said.

Pension funds staged a partial recovery in the first half, generating investment returns of 3.5 percent in nominal terms, said the OECD, whose 30 members are mostly rich industrialised economies.

Best performing funds in the OECD area were, on average, in Norway and Turkey, with nominal returns of more than 10 percent, compared with nominal returns of 4 percent for funds in the United States, the report said.

Total pension funds assets still remained 14 percent below their December 2007 levels as of June 30, 2009, it said in a report called OECD Pensions Markets in Focus.

“Thanks to the stock market rally in emerging markets, some non-OECD countries have already largely made up their 2008 investment losses,” the report said.

By the middle of the year, Chilean pension funds had largely made up their 2008 losses, while assets of Israeli pension funds were above their December 2007 level, the report said.

The market value of pension funds tracked by the OECD fell to $22.4 trillion by the end of 2008 from $27.8 trillion at the end of 2007.

Global share prices as measured by the MSCI All-Country World Index have risen close to 70 percent from a trough in early March.

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Editing by Ruth Pitchford