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December 2, 2004 04:19 PM

Fidelity Analyzes Pension Performance


Excerpt: Pension plans whose current assets match or exceed their future liabilities perform better on average than their underfunded brethren, according to a study released Wednesday by Fidelity Investments, the biggest U.S. mutual fund company.


Pension plans whose current assets match or exceed their future liabilities perform better on average than their underfunded brethren, according to a study released Wednesday by Fidelity Investments, the biggest U.S. mutual fund company.

Of 120 defined benefit pension plans responding to the survey, 43, or 36 percent, were overfunded, said Drew Lawton, president of Fidelity Management Trust Co. If applied to all U.S. pension plans, that 36 percent would translate to 2,635 out of 7,320 plans, he said.

The study called "No Time for Complacency" found that overfunded pension plans had an average annual return of 5.45 percent for the five fiscal years ending in 2003. That beat the 4.60 percent average return of underfunded plans.

"We did find that overfunded plans tended to perform better," Lawton said, citing the plans' "opportunistic" approach to asset allocation, ability to manage risk and "efficient" hiring practices as key factors.

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Read all 23 posts in the same category of Retirement:

Bush Says Social Security Plan Would Reassure Markets - Dec 17, 2004
Are You Ready To Retire? - Dec 13, 2004
Last-Minute Retirement Planning - Dec 12, 2004
Small Change Adds Up To Big Savings - Dec 09, 2004
Bush To Borrow To Fix Social Security - Dec 07, 2004
Moving Smoothly Into Retirement - Dec 07, 2004
Get Healthy, Get Wealthy - Dec 06, 2004
Five Books to Retire By - Dec 05, 2004
Tax Policy Promotes Early Retirement - Dec 02, 2004
Social Security COLA Increase Looks Puny - Dec 02, 2004
No More IRA Leniency - Nov 29, 2004
To Yield A Good Retirement, Get Real, And Work It Out - Nov 28, 2004
Social Security Reforms On The Way? - Nov 26, 2004
Some New Ways To Preserve Your Retirement - Nov 23, 2004
Living Trust Offers: How to Make Sure They're Trust-Worthy - Nov 22, 2004
How to Forecast a Lifespan - Nov 21, 2004
Be Happy, And Put Retirement Fears to Rest - Nov 21, 2004
Seven Ways to Stop Saying 'Oops!' - Nov 21, 2004
Retirees Don't Have to Be So Frugal: A Case for Withdrawing Up to 6% a Year - Nov 17, 2004
How to Avoid Living Like a Poor Student at Age 70 - Nov 09, 2004
What Social Security Might Look Like - Nov 09, 2004
Are You Retirement Ready -- Or Not? - Nov 03, 2004