The extreme levels of volatility seen over the past year have presented headaches for pension funds the world over. With their traditional asset allocation mix of 40% in equities and 60% in fixed income, they have been particularly vulnerable to plunges in stock markets and falling bond yields in 2008.
At the end of November, New York-based consultancy Mercer reported that defined-benefit pension plans sponsored by US companies in the S&P 1500 slumped to a record combined deficit of $280 billion
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