Household Financial Wealth By Selected Country US$ Trillions 60 50-37% Indicates Projected Shortfall 40 30 20 Extrapolation of Historical Growth 2003-24 Projection (Based on Demographic Trends) -47% -34% -25% -39% 10 0 U.S. Japan U.K. Germany Italy Source: McKinsey Global Institute
Public Fund Survey Overview Survey presents data in public retirement systems that provide pension and other benefits for a combined 12.8 million active (working) members and six million annuitants. Combined, systems in the survey hold trust $2.26 trillion, invested in diversified portfolios of public and private equities, corp. and gov. bonds, real estate, cash etc. According to the U.S. Census, state and local government employees comprise more than 10% of the nation s workforce.
Asset Allocation of Systems in Public Fund Survey Real Estate 4.8% Alternatives 4.4% Cash 1.9% International Fixed Income 1.3% Domestic Fixed Income 27.0% Equities 60.5%
Actuarial Funding Aggregate for the 125 Plans in the Public Fund Survey Actuarial Funding Ratio 85.9% Actuarial Assets (000's) $2,254,612,148 Actuarial Liabilities (000's) $2,625,305,539 Unfunded Liability (Surplus) (000's) $370,693,391
Actuarial Assumptions Median for the 125 Plans in the Public Fund Survey Investment Return Assumption 8.0% Inflation Assumptions 3.5% Assumed Real Rate of Return 4.5% Actuarial Valuation Date 6/30/2005
Change in Aggregate Actuarial Assets, Liabilities, and Funding Levels Aggregate for the 114 Plans in the Public Fund Survey US$ Trillions 2.4 2.3 2.2 2.1 2.0 1.9 Actuarial Assets - L Actuarial Liabilities - L Actuarial Funding Ratio - R Percent 105 100 95 90 1.8 01 02 03 Fiscal Year 04 05 85
Annual Change in the Aggregate Actuarial Value of Assets and Liabilites Based on 117 Plans in the Public Fund Survey Percent 10 8 Assets Liabilities 6 4 2 0 02 03 Fiscal Year 04 05
Median Annual Public Pension Fund Investment Returns Based on 117 Plans in the Public Fund Survey Percent 20 15 10 5 0-5 -10 01 02 03 Fiscal Year 04 05 06
Ratio of Actives per Annuitant Annuitants Include Retired Members, Beneficiaries, Disabilitants Ratio 2.5 2.4 2.3 2.2 2.1 01 02 03 Fiscal Year 04 05
Combined Market Value of Assets in the Public Fund Survey Aggregate for the 94 Systems in the Public Fund Survey US$ Trillions 2.2 2.1 2.0 Combined Assets - L Annual Change - R Percent 15 10 5 1.9 0 1.8-5 1.7 01 02 03 Fiscal Year 04 05-10
Pension Benefits Paid Aggregate for the 91 Systems in the Public Fund Survey US$ Billions 120 110 100 90 Pension Benefits Paid - L Annual Change - R Percent 12 11 10 9 8 7 80 01 02 03 Fiscal Year 04 05 6
Pension Contributions and Annual Change Aggregate for the 91 Systems in the Public Fund Survey US$ Billions 75 Percent 12 70 65 60 55 50 45 Pension Contrib. - L Annual Change - R 10 8 6 40 01 02 03 Fiscal Year 04 05 4
Market Value of System Assets Ranked by Top Ten Systems, As of 6/30/06 Ra nk Syste m Na m e Asset Market Value (US$ Millions) Active Members Annuitants 1 Ca lpers $211.6 809,690 443,341 2CalSTRS $144.2 450,282 201,241 3 New York State and Local Retirement Systems $142.6 595,736 334,251 4 Florida Re tire m e nt Syste m $116.3 664,819 282,184 5 Teacher Retirement System of Texas $100.7 782,679 257,144 6 New York State Teachers Retirement System $91.5 260,041 129,587 7 New Jersey Division of Pension and Benefits $79.3 514,219 223,372 8 Wisconsin Retirement Systems $67.9 262,085 126,445 9 North Carolina Retirement Systems $63.9 432,874 165,305 10 Ohio State Teachers Retirement System $62.1 175,065 119,184
Unfunded Liability Surplus Rank is Based on 124 Plans, As of 6/30/06 Unfunded Liability Rank Plan Name (Surplus) 1 Florida RS ($6,181,784) 2 NC Teachers and State Employees ($3,555,655) 3 Oregon PERS ($2,088,600) 4 Texas County & District ($569,314) 5 San Francisco County and District ($414,542)......... 120 Texas Teachers $13,639,000 121 Ohio Teachers $19,362,974 122 California Teachers $20,311,000 123 Illinois Teachers $22,412,024 124 California PERF $26,630,000
Projected Risk and Return By State Pension System Source: Wilshire Consulting
100 Most Underfunded S&P 500 Defined-Benefit Plans US$ Billions 40 20 0 $26-20 -40-60 -80 -$141 -$114 -$137 -$138 -$94-100 -120-140 -160 2001 2002 2003 2004 2005 2006 Source: Bloomberg
Pension and Life Insurance Assets in Selected Countries Percent of GDP, 2005 Pension Reserve Funds Pension Funds Life Insurance United States 45.3 93.8 22.8 Ireland 10.4 52.8 51.4 Norway 73.5 6.8 25.9 Denmark 0.3 32.9 69.5 Japan 42.1 18.8 41.6 Sweden 29.0 14.5 51.1 Finland 5.3 66.1 16.3 Canada 5.9 50.4 22.4 France 1.6 5.8 43.8 Korea 17.6 1.9 18.7 Portugal 3.9 12.9 18.9 New Zealand 4.2 11.3 4.9 % 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 Source: OECD, Global Pension Statistics, Insurance Statistics and other administrative sources.
Importance of Pension Funds in Selected Countries Percent of GDP, 2005 Netherlands Iceland Switzerland U.S. U.K. Finland Australia Ireland Canada Denmark Japan Sweden Portugal New Zealand Spain Poland Hungary Mexico Norway France Austria Belgium Czech Rep. Germany Italy S. Korea Slovak Rep. Luxembourg Turkey Greece 0 01 0 4 45 2 34 6 77 9 99 11 1314 19 Source: OECD, Global Pension Statistics, Insurance Statistics and other administrative sources. 33 50 53 58 Weighted average: 87.6% 66 66 99 117 123 125 0 25 50 75 100 125 %
Private Pension Plans Assets by Type of Financing Vehicle US$ Billions and As a Share of Total, 2004 Pensino funds Book reserve Pension insurance contract Canada 477 127 50 Denmark 73 180 Finland 84 13 Italy 44 4 3 Korea 12 35 Spain 95 17 Sweden 43 6 86 United States 11,638 1,987 0% 20% 40% 60% 80% 100% Source: OECD, Global Pension Statistics, Insurance Statistics and other administrative sources.
Cash Flows from G-10 Government Bonds and Projected Pension Payments Percent 4000 3000 2000 1000 Payments from G-10 Government Bonds Outstanding Projected Payments Out of G-10 Pension Fund Liabilities Cash Flows Assumption: 75 percent of total pension fund assets are allocated to bonds 0-1000 -2000 2006 2014 2022 2030 2038 2046 2054 Source: OECD, Global Pension Statistics, Insurance Statistics and other administrative sources.
Health Care Expenditure for Selected Countries Public and Private Spending, as Percent of GDP Percent of GDP 20 16 Private spending Public spending 12 8 8.5 2.4 2.3 3.0 1.6 3.0 3.5 1.8 1.9 1.2 1.5 1.8 2.5 4 6.9 8.5 8.3 6.9 8.1 6.2 5.7 7.1 6.5 7.1 6.5 5.7 6.4 0 U.S. Germany France Canada Norway Australia Neth. Denmark N. Zealand U.K. Japan Finland OECD Source: OECD, Global Pension Statistics, Insurance Statistics and other administrative sources.