If you judged only from the headlines, you'd think that pension funds were becoming an endangered species in the retirement plan world, increasingly replaced by their defined-contribution cousins. Of course, the shift is very real, as only about 10% of workers are now covered by a defined benefit plan, down from closer to 60% in the 1980s. The private sector in particular has embraced the shift, as nearly 40% of existing corporate pension plans have now frozen their benefit accruals.
That said, to completely discount the role of pension funds - particularly public pension funds - in today's financial markets would be a grave mistake. If anything, the influence of the largest pension fund players has grown in recent years, with aggregate pension fund assets across all OECD nations now totaling approximately $30 trillion. That $30 trillion figure represents nearly 62% of aggregate GDP for the OECD nations,…
