scholarly journals Pension Reform in Mexico: The Evolution of Pension Fund Management Fees and Their Effect on Pension Balances

2008 ◽  
Author(s):  
Emma Aguila ◽  
Michael D. Hurd ◽  
Susann Rohwedder
Keyword(s):  
Pension Fund ◽  
Pension Reform ◽  
Fund Management ◽  
Management Fees ◽  
Pension Fund Management

PLAC Network Best Practices Series: Target-Income Design of Incentives, Benchmark Portfolios and Performance Metrics for Pension Funds

2021 ◽  
Author(s):  
Daniel García-Mantilla
Keyword(s):  
Best Practices ◽  
Interest Rates ◽  
Conversion Rate ◽  
Pension Fund ◽  
Performance Metrics ◽  
Retirement Income ◽  
Fund Management ◽  
Management Fees ◽  
Pension Fund Management ◽  
Regulatory Incentives

In defined contribution systems, at the end of the accumulation phase the assets in the retirement account are exchanged for a pension. The conversion rate from assets to retirement income (which depends on the level of interest rates) is very volatile, and its variations constitute the main investment risk facing pension fund affiliates. In this sense, performance metrics, management fees and benchmark portfolios that focus on assets (and asset returns) and ignore the variations in the conversion rate, embed several problems: i. they send wrong signals to regulators, fund managers and workers, ii. they provide wrong incentives to pension fund management companies, and iii. they leave pension fund affiliates exposed to their largest risk factor, even during the last few years preceding their retirement date. We find that regulatory incentives with these fundamental problems are ubiquitous in the region. The document presents a series of best practices, and delivers a practical set of tools to assist regulators and supervisors in designing a framework that improves security and sufficiency of retirement income, and provides relevant and timely information to pension fund affiliates. The framework achieves that by fostering an integration of the accumulation and the payout phases, and an alignment of the regulatory incentives for pension fund management companies with the retirement income objectives of pension fund affiliates. Using historical data from Colombia as a case study, the document illustrates and quantifies the improvements in terms of pension benefits and retirement income security that the proposed framework could bring.

scholarly journals Buying CSR with employees’ pensions? The effect of social responsible investments on Norwegian SMEs’ choice of pension fund management

2017 ◽  
Vol 35 (1) ◽  
pp. 56-74 ◽  
Author(s):  
Harald Biong ◽  
Ragnhild Silkoset
Keyword(s):  
Pension Fund ◽  
Pension Funds ◽  
Decision Makers ◽  
Expected Returns ◽  
Fund Management ◽  
Socially Responsible ◽  
Expected Return ◽  
Content Type ◽  
Management Fees ◽  
Pension Fund Management

Purpose Employees often expect an emphasis on financial aspects to be predominant when their employers choose a fund management company for the investment of employees’ pension fund deposits. By contrast, in an attempt to appear as socially responsible company managers may emphasize social responsibility (SR) in pension fund choices. The purpose of this paper is to examine to what extent managers for small- and medium-sized companies emphasize SR vs expected returns when choosing investment managers for their employees’ pension funds. Design/methodology/approach A conjoint experiment among 276 Norwegian SMEs’ decision makers examines their trade-offs between social and financial goals in their choice of employees’ pension management. Furthermore, the study examines how the companies’ decision makers’ characteristics influence their pension fund management choices. Findings The findings show that the employers placed the greatest weight to suppliers providing funds adhering to socially responsible investment (SRI) practices, followed by the suppliers’ corporate brand credibility, the funds’ expected return, and the suppliers’ management fees. Second, employers with investment expertise emphasized expected returns and downplayed SR in their choice, whereas employers with stated CSR-strategies downplayed expected return and emphasized SR. Originality/value Choice of supplier to manage employees’ pension funds relates to a general discussion on whether companies should do well – maximizing value, or do good, – maximizing corporate SR. In this study, doing well means maximizing expected returns and minimizing costs of the pension investments, whereas doing good means emphasizing SRI in this choice. Unfortunately, the employees might pay a price for their companies’ ethicality as moral considerations may conflict with maximizing the employees’ pension fund value.

Optimal Multistage Defined-Benefit Pension Fund Management

2017 ◽  
pp. 267-296 ◽  
Author(s):  
Giorgio Consigli ◽  
Vittorio Moriggia ◽  
Elena Benincasa ◽  
Giacomo Landoni ◽  
Filomena Petronio ◽  
...  
Keyword(s):  
Pension Fund ◽  
Defined Benefit ◽  
Fund Management ◽  
Pension Fund Management

Pension fund management with hedging derivatives, stochastic dominance and nodal contamination

Omega ◽  
2019 ◽  
Vol 87 ◽  
pp. 127-141 ◽  
Author(s):  
Vittorio Moriggia ◽  
Miloš Kopa ◽  
Sebastiano Vitali
Keyword(s):  
Stochastic Dominance ◽  
Pension Fund ◽  
Fund Management ◽  
Pension Fund Management

Portfolio allocation for public pension funds

2011 ◽  
Vol 10 (2) ◽  
pp. 221-245 ◽  
Author(s):  
GEORGE PENNACCHI ◽  
MAHDI RASTAD
Keyword(s):  
Pension Fund ◽  
Pension Funds ◽  
Pension Plans ◽  
Public Pension ◽  
Annual Data ◽  
Portfolio Risk ◽  
Fund Management ◽  
Pension Fund Management ◽  
Portfolio Allocations ◽  
State Pension

AbstractThis paper presents a model of a public pension fund's choice of portfolio risk. Optimal portfolio allocations are derived when pension fund management maximize the utility of wealth of a representative taxpayer or when pension fund management maximize their own utility of compensation. The model's implications are examined using annual data on the portfolio allocations and plan characteristics of 125 state pension funds over the 2000–2009 period. Consistent with agency behavior by public pension fund management, we find evidence that funds chose greater overall asset – liability portfolio risk following periods of relatively poor investment performance. In addition, pension plans that select a relatively high rate with which to discount their liabilities tend to choose riskier portfolios. Moreover, consistent with a desire to gamble for higher benefits, pension plans take more risk when they have greater representation by plan participants on their Boards of Trustees.

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