U.S pension funds

--U.S. pension assets rose to $14.4 trillion in 2005 from$13.5 trillion in 2004, according the Employee Benefit Research Institute in Washington. The 2005 figure is the latest available. --The federal Pension Protection Act passed last year requires company pensions to bring assets in line with future liabilities. That means pensions, which in 2006 were underfunded by $350 billion as measured by the Pension Benefit GuarantyCorp., must be fully funded by 2013. --To catch up, many funds loaded up on stocks. The S&P 500has gained more than 9 percent this year, including the reinvestment of dividends. --The act was the first step in pension reform. Now, manyfund managers and their advisers speculate that accounting rule makers will eliminate accounting techniques companies have used to minimize the effects of volatility in their pension holdings. To minimize volatility, many funds decide to buy bonds, which experience lower swings in prices. --Pension managers often need approval from their boards of directors before changing investment strategy, which can take months to secure, suggesting that demand for longer-dated Treasuries will build gradually, said Ethan Kra, chief actuary at Mercer Human Resource Consulting in New York. Mercer callsitself the largest human resources consultant. --``You're seeing the beginning of a snowball at the top of the hill,'' Kra said. ``Pension plan managers don't move on a dime,'' so it may take some time before the snowball ``becomesan avalanche,'' he said. --The surge in equities this month to record highs has wiped out the pension deficits of the companies in the Standard & Poor's 500 for the first time in six years, according UBS Securities LLC.