Pension funds staged a partial recovery in the first half of 2009, generating investment returns of 3.5% in nominal terms. But, as of 30 June 2009, total pension funds assets still remained 14% below their December 2007 levels, according to the latest edition of OECD Pensions Markets in Focus.
For the OECD as a whole, in the first half of 2009 funded pension arrangements have recovered USD 1.5 trillion of the USD 5.4 trillion in market value that they lost in 2008.
Thanks to the stock market rally in emerging markets, some non-OECD countries have already largely made up their 2008 investment losses. 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.
Another performance indicator that shows a market improvement are funding ratios of defined benefit pension plans. The average funding level for OECD defined benefit pension plans went up from a 24% deficit at the end of 2008 to an estimated 18% deficit by June this year. Funding levels improved thanks to both investment gains and higher discount rates.