TORONTO (Reuters UK) - One of Canada's largest pension funds said on Wednesday that it made a "preliminary approach" to the majority shareholder of Moneysupermarket.com MONY but that it has no current intention of making an offer for the price-comparison website. Ontario Teachers' Pension Plan,...
The economic crisis in Argentina is affecting the country's pension system. The International Monetary Fund IMF withheld a US$1.3 billion loan in December 2001 because it was dissatisfied with the government's progress toward fiscal reform. As the Argentine government struggled to avert default on its foreign debt, it undertook a...
Nine out of ten US pension plans are underfunded, many because the capital markets have failed to meet the ambitious expectations of fund managers. Some have been hoping that an upswing will bail them out or relying on accounting changes to smooth over the gap. Rather than waiting for outside...
By Jennifer Hill LONDON (Reuters UK) - Almost half of final salary pension funds have moved assets from equities to bonds in the past year, as they respond to market volatility and aim to match assets more closely with liabilities, figures show. Some 46 percent of...
Creating shareholder value and mitigating risk are two important themes in pension fund management and design. The volatile accounting costs and contribution requirements of Defined Benefit DB pension plans have prompted many global companies to consider switching to Defined Contribution DC plans as the sole vehicle for employer-supported retirement income....
Five New York City public pension funds that did not join in the $6.1 billion WorldCom class-action settlement have settled their own lawsuits for a total of $78.9 million. The pension funds lost more than $200 million on WorldCom stock and bond investments after the company, now called MCI, filed...
The legal framework for Swiss pension funds has been altered recently by reform of pension fund law and the signature of the bilateral treaties between Switzerland and the European Union. In addition, tax regulations that will come into force next year will provide several planning opportunities for Swiss pension funds,...
The performance of mutual fund or pension fund managers is often evaluated by comparing the returns of managed portfolios with those of a benchmark, often defined from an index. As most portfolio managers use dynamic rules for rebalancing their portfolios, we use a dynamic framework to study the optimization of...
This paper considers the role of equities and other return-seeking assets in pension funds and how this will evolve in the coming years. While the analysis concentrates principally on defined benefit DB final salary plans, it also touches briefly on defined contribution DC and hybrid plans that will, in future,...
This paper initially explores the rationale and growth of corporate social responsibility by companies. The paper then charts the development and legislative background to the regulations to the Pensions Act 1995 and the forthcoming Charities Act 2005, which for the first time obliges charities and pension scheme trustees to state...
The understanding and management of risk remains a difficult subject for both the trustees and the sponsor and, increasingly, requires significantly enhanced levels of expertise as the complexity of pension fund management increases. This paper argues that pension funds can position themselves significantly better for the future. Changing lanes challenges...
Invoking a transparent accounting framework based on economics rather than actuarial and accounting traditions, Bader (2003) concludes that shifting the corporate plan investments from equities to bonds adds value for shareholders a tax arbitrage gain and for participants benefit security gain). Nonetheless, the paper shows that parallel reasoning leads to...
This paper asserts that the management of the assets of defined benefit DB plans has been guided by a simple three-part paradigm. This paper shows that within this 'old' paradigm framework, the average US DB pension fund performed reasonably well over the 10-year period ending 2002. But it also shows...
This paper focuses on the investment behavior of pension funds in developed and emerging market countries. First, it analyzes the main determinants of the emerging market asset allocation of pension funds in developed countries. Second, it assesses how pension funds in emerging markets have contributed to the development of local...
For any company considering whether to offer or continue to offer a traditional defined benefit DB pension scheme, the fundamental issue is whether the benefit of doing so justifies the cost. The rationale is clear: in providing a desirable benefit for employees, the company hopes to attract and then retain...
This paper investigates the benefits of optioned portfolios for liability organizations such as pension funds and insurance companies, whose primary concern is the downside risk of the funding level, rather than the market exposure of the investments. Using the real-life data of a pension fund empirically show that the use...
This article reviews the role of mathematics as a tool in the running of pension funds. It considers separately defined benefit DB and defined contribution DC pension funds. It concentrates here on final salary schemes, and in order to illustrate the various uses of mathematics considering some simple cases. DC...
This paper contributes to the literature on institutional herding and positive feedback trading by analyzing the behavior of pension fund investors on the Polish stock market. Their entrance on the Polish stock market due to the national pension system reform in 1999 provides a unique opportunity to receive deeper insight...
This paper extends the empirical finance literature about the influence of institutional traders by investigating the impact of Polish pension funds trading on individual stock return autocorrelation. The pension reform in 1999 and the associated increase in institutional traders' investment activities provides the unique opportunity to receive additional insight into...
This paper uses a scenario-based ALM model to study the effects on the risk-return profile of defined benefit pension funds from including options in the pension fund portfolio. The results show that properly constructed option strategies can add substantial value to pension fund management. The results are robust with respect...
