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Market turmoil leads to less appetite for risk by pension funds, State Street global survey finds

“Pension funds are very much focused on their investment mix and changing that mix to isolate (themselves) from some of the volatility that we have seen in the global stock markets,” said Rob Baillie, head of State Street Canada, when referring to a key conclusion emerging from the annual survey of pension funds conducted by its Boston-based parent.

For those employees with a defined benefit pension plan, the ride ahead looks enjoyable; for those with a defined contribution plan the ride will be less enjoyable while those without a pension plan, start saving.

Those differences result from the type of pension funds being offered by employers, and the difficult challenge for the investment managers to generate the benefits that have been promised.

“Pension funds are very much focused on their investment mix and changing that mix to isolate (themselves) from some of the volatility that we have seen in the global stock markets,” said Rob Baillie, head of State Street Canada, when referring to a key conclusion emerging from the annual survey of pension funds conducted by its Boston-based parent.

“The funds are diversifying some of the risk away and to try and generate returns that are hopefully stronger and not correlated to the global markets,” added Baillie, noting greater exposure to alternative investments is one approach.

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