Health-care organizations had a 7.7% average return on their pension assets in fiscal year 2006, down from 10% in fiscal 2005, according to the Commonfund Benchmarks Study Healthcare Report 2006.
Organizations with $1 billion or more in combined operating and pension money reported their pension fund investments returned an average of 7.4% in the year ended June 30, down from 11.1% in the previous fiscal year.
Pension funds of health-care organizations overall returned an average 13% for the three years ended June 30, up from 6.9% for the three years ended June 30, 2005. The funds also returned 4.6% for the five-year period, up from 4% for the five years ended June 30, 2005.
Also, 21% of all health-care organizations — and 32% of the largest institutions — have frozen or plan to freeze their defined benefit plans.
Of all 202 respondents in the survey, 72% sponsor defined benefit plans, while 85% of organizations with $1 billion or more in total assets have pension plans. In addition, 81% of all organizations sponsor defined contribution plans, while 90% with $1 billion or more in total assets have defined contribution plans.