I was looking at GM’s financials in Value Line and saw that they have Pension Assets of $115.9 billion and Pension Obligations of $184.9 billion. There’s a wee little bit of a gap there if you do the math. It made me curious as to how they’ve allocated their pension assets, and Note 16 in the most recent 10-K revealed this:

“The strategic mix for U.S. pension plans that was implemented in the latter part of 2003 and the first half of 2004 has reduced exposure to equity market risks and increased allocation to asset classes which are not highly correlated as well as asset classes where active management has historically generated excess returns and places greater emphasis on manager skills to produce excess return while employing various risk mitigation strategies to reduce volatility.

As of December 31, 2004, GM pension assets had the following allocation ranges: global equity, 41%-49%; global bonds, 30%-36%; real estate, 8%-12%; and alternatives, 9%-13%. Overall, this strategic policy mix is expected to result in comparable but less volatile returns than GM’s prior asset mix.”

I guess “alternatives” means hedge funds. It would be interesting to have a bar chart showing the asset allocation mix going back every year as far as possible to see how it has changed over time… and exactly when “alternatives” showed up as an asset class.