Evaluating the Financial Performance of Pension Funds
Since the early 1980s, the structure of arrangements to provide retirement income has gradually moved from defined benefit (DB) systems to various types of arrangements in which the provision of pensions is backed by assets, either in individual accounts or in collective schemes. This change has been motivated principally by governments seeking to lessen the fiscal impact of aging populations and to diversify the sources of retirement income. One of the key results is that many pension systems are now in the process of becoming asset backed. This increasingly links retirement incomes to the performance of these assets, resulting in participants being exposed to the uncertainties of investment markets to determine the level of benefits that they will ultimately receive. The potential consequences of this have never been more evident than during the recent global financial crisis. This introductory chapter provides an overview of the issues and motivation for this work and summarizes the studies that were conducted and their main findings. It concludes with policy-related observations that arise from the overall consideration of the research program. The remainder of the volume contains a selection of the studies undertaken through the partnership that focus on developing approaches to evaluate performance of pension funds and concludes with observations and commentary from four noted experts in the field on the issues raised by this work and the interpretation of the findings.
| Main Authors: | , , , |
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| Language: | English |
| Published: |
World Bank
2010
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| Subjects: | PENSION, |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000333037_20100115010513 https://hdl.handle.net/10986/2405 |
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| Summary: | Since the early 1980s, the structure of
arrangements to provide retirement income has gradually
moved from defined benefit (DB) systems to various types of
arrangements in which the provision of pensions is backed by
assets, either in individual accounts or in collective
schemes. This change has been motivated principally by
governments seeking to lessen the fiscal impact of aging
populations and to diversify the sources of retirement
income. One of the key results is that many pension systems
are now in the process of becoming asset backed. This
increasingly links retirement incomes to the performance of
these assets, resulting in participants being exposed to the
uncertainties of investment markets to determine the level
of benefits that they will ultimately receive. The potential
consequences of this have never been more evident than
during the recent global financial crisis. This introductory
chapter provides an overview of the issues and motivation
for this work and summarizes the studies that were conducted
and their main findings. It concludes with policy-related
observations that arise from the overall consideration of
the research program. The remainder of the volume contains a
selection of the studies undertaken through the partnership
that focus on developing approaches to evaluate performance
of pension funds and concludes with observations and
commentary from four noted experts in the field on the
issues raised by this work and the interpretation of the findings. |
|---|