£327m hit for council pension fund investment values during coronavirus pandemic
PUBLISHED: 07:30 02 June 2020 | UPDATED: 13:50 05 June 2020
The value of pension fund investments by Suffolk County Council plummeted by £327million as a result of coronavirus, latest figures show.
Data for the three months to the end of March 2020 showed the fund’s value was £2.802billion, a decrease of £327m and over 10% since December 31 2019.
Pension fund managers at the authority said it reflected the global market reaction to the coronavirus pandemic, and meant the year end annual return was down 4.5%.
MORE: Bookmark the EADT coronavirus topic page for latest updates
But chiefs say a v-shaped recovery was happening as the world begins to ease lockdown measures which hit economies hard.
Paul Finbow, senior pensions specialist at Suffolk County Council said: “It’s quite a significant drop and that actually meant that the fund lost just over 10% in the first three months of 2020.
“The annual return is a drop of 4.5% for the financial year 19/20. Although that’s significant, to put it into context we had three years since the start of the 2000s that have some significant drops in the fund value.
“In 2001 the fund dropped by just over 10%, in 2003 it was 18% and in 2009 in the financial crisis the fund dropped 22% in one financial year. So in context the 4.5% negative is a poor return but nothing like the significant drop in returns than we have seen in the past.
“Markets have recovered somewhat and the fund value as of yesterday [May 31] had risen back to £2.976bn, an increase of about 6% from the March valuations.”
The council confirmed it had been in dialogue with its investment managers to discuss the impact of the pandemic and what measures were being taken to minimise the impacts.
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The council’s report said: “Without definitive medical progress – vaccination, testing and isolating, or ascertaining evidence of herd immunity – the behaviour of consumers and businesses is likely to remain affected, hampering a return to pre-outbreak levels of economic activity.”
Other considerations include the longer-term impact on things such as use of public transport and commuting, the ability of retail to recover and whether office-based companies would consider returning to those or utilising working from home more.
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