Visualizing Financial Data

Chapter 8 Pension Funds

Pension funds are the largest managed pooled investment and represent $36.1 trillion worldwide (according to the 2015 Towers Watson annual Global Pension Assets Study of 16 major markets). Many pension funds have significant funding gaps, and with greater market volatility, longer life expectancies, population bulges, and inflation, they continue to face adversity. Over the years, plan sponsors have made a number of changes to reduce their deficits including decreasing benefits, increasing employee contributions, increasing the retirement age, and shifting toward defined contribution plans. Given the changing landscape and the impact to millions of active participants in pension plans worldwide, a close review of the data is called for to tell a clear story of the current state of the funds and to help make accurate predictions about their future directions.

The California Public Employees’ Retirement System (CalPERS) represents the fifth largest pension in the world (Bloomberg data, 2014). Managers of this complex fund produce a 250-page annual report that incorporates numeric data to explain details within the current status of the fund. The report holds the majority of the data in tables and uses only seven charts to display the financial overview and fund performance, making it difficult to extract meaningful conclusions from the data. More can ...