NEW YORK, March 9 (UPI) -- Private U.S. pension funds are pulling back from equity markets, while state pension funds are headed in the opposite direction, records show.
Benefit consulting firm Towers Watson said two-thirds of executives at financial firms indicated they would reduce the stock holdings of their company's pension funds by the end of the year, The New York Times reported Tuesday.
Similarly, a Pyramis Global Advisors survey in November indicated more than 50 percent of corporations planned on reducing the percentage of U.S. stocks in their pension fund portfolios.
But government pension funds that were counting on high rates of returns on investments before equity markets tumbled in 2008 and 2009 are now increasing their equity risk-taking in an attempt to "double up to catch up," said Frederick Rowe, former chairman of the Texas Pension Review Board.
By covering their bets with riskier bets, "in effect, they're going to Las Vegas," Rowe said.
Trent May, chief investment officer for Wyoming's state pension fund, said states do not want to adjust their earnings estimates because on paper "liabilities would explode."
That forces states to take higher risks with investments or cut back on benefit obligations, the newspaper said.
