Solidarities in collective pension schemes

Collective pension schemes are the dominant form of saving for retirement in the Netherlands. We investigate the introduction of individual choices into a collective pension system without affecting the generally accepted advantages of a collective agreement. Increasing individual choices can be beneficial, as it prevents pension plans from making decisions for the average plan participant that may not be optimal for individual participants. We argue for a system in which individuals choose from a set of low-cost balanced index funds, together with a level of intergenerational guarantees that are exchange-traded. This system maintains the two primary advantages of collective agreements: risk sharing and low implementation costs, while facilitating different risk taking behavior at the individual level. To facilitate individual choices within collective pension schemes, it is important to enhance the transparency associated with intergenerational guarantees to all participants in the scheme, both in terms of their price and quantity. We argue that the current system, in which long-term guarantees are given by the young to the old within a specific fund but not across pension funds, is not transparent and we argue that it can be suboptimal. We propose a system ofPension Guarantee Exchanges(PGEs) that increase transparency and allow pension funds with different age distributions to trade with each other. Knowing the price of such guarantees facilitates the introduction of individual portfolio choices within collective pension schemes.

The Allocation of Financial Risks During the Life Cycle in Individual and Collective DC Pension Contracts

Sustainability of participation in collective pension schemes: An option pricing approach

Michael Otsuka argues that collective pension schemes are forms of social cooperation on equal terms for mutual advantage and thus, matters of social justice. In this way Otsuka wants to understand collectively funded pensions in Rawlsian terms. I argue that not all forms of social cooperation are the same and that the specific kind of social cooperation Rawls has in mind is, in at least three central respects, different from the kind of social cooperation involved in the collective pension schemes Otsuka describes.

Corporate defined-benefit plans suffer from a number of serious weaknesses, including credit risk of the sponsor, ambiguous ownership of the surplus and back-loading of benefits. Also defined-contribution plans feature drawbacks. Individuals are not well equipped to make the complex financial decisions involved, transaction costs are substantial and various risks are not managed properly over the life cycle. Stand-alone collective pension schemes offer an attractive third way between corporate defined-benefit schemes and individual defined-contribution schemes. The members of the fund are the risk bearers and the funds manage risk aimed at providing an adequate income level during retirement at low costs. Dutch pension funds are evolving into such stand-alone pension schemes. Some directions for future reforms are sketched. Copyright The Author(s) 2009

We explore how members of a collective pension scheme can share inflation risks in the absence of suitable financial market instruments. Using intergenerational risk-sharing arrangements, risks can be allocated better across the scheme's participants than would be the case in a strictly individual- or cohort-based pension scheme, as these can only lay off risks via existing financial market instruments. Hence, intergenerational sharing of these risks enhances welfare. In view of the sizes of their funded pension sectors, this would be particularly beneficial for the Netherlands and the U.K.

This study examined the effect of pension fund characteristics on the financial performance of Pension Fund Administrators in Nigeria. It is necessitated by the limited empirical evidence on the specific factors influencing the financial performance pension fund administrators, given the growing importance of pension funds in Nigeria's capital markets. Using an ex-post facto research design, the study analyzes data from 6 pension fund administrators selected from a population of 21, covering the period 2010 - 2024. The study employs correlation and multiple regression analyses to assess the relationships between corporate age, corporate expenditure, corporate revenue, investment growth, and financial performance, measured by Return on Capital Employed (ROCE). The findings reveal that corporate age, corporate revenue, and investment growth have significant positive effects on financial performance, while corporate expenditure exhibits a significant negative impact. The regressors of the study explain 86.8% of the variance in financial performance, indicating strong predictive power. These results suggest that older, more established pension fund administrators with robust revenue streams and effective investment strategies tend to perform better financially, whereas higher operational costs detract from performance. The study concludes that institutional experience, revenue generation, and investment expertise are critical drivers of financial success in Nigeria's pension sector, while cost management remains a key challenge. Based on these findings, the study recommends that pension fund administrators should focus on optimizing revenue streams, enhancing investment frameworks, and implementing stringent cost-control measures. Regulatory authorities should also strengthen oversight mechanisms to ensure sustainable financial performance.

The proposed paper is one of a set of articles dedicated to the new phenomenon in the global and national financial markets – financial convergence – and is focused on theoretical issues. The hypothesis of the article is to argue whether the financial convergence determines the directions of financial market (namely, insurance and pension sectors) development. Adequately the goal of this paper is to analyze the existence of convergence processes in the insurance and pension markets. Methods of systematic and logical analysis are used. In the first part authors give brief history of the convergence phenomenon research. Then the paper analyses influence of financial convergence on insurance and pension markets, manifested in the following effects: mix of financial institutions functions; distribution channels advantages, increase of insurance and pension funds companies’ competitiveness; governance models convergence. The major results of the study are: demographic shifts in different developed and emerging markets countries caused the need to reform the social security systems and public pension schemes and refocus them to the market-based financial convergence model; pension funds, acting as institutional investors, are the leading players in the contemporary global financial market; competition at the financial market causes the expansion of a number of services offered by various organizations: banks, insurance companies, pension funds and so on, which offer a wide range of services not directly related to their core businesses; the mixing of financial institutions functions from the insurance, pension and banking sectors, increased competition for customers at the national and global financial market.

Never has there been so much media interest in pensions as there is currently. Never has the pensions world changed so rapidly as it has over the last few years; we have seen the introduction of a new state supplementary pension scheme, new stakeholder pensions, and a flood of companies closing their final salary schemes and replacing them with defined contribution schemes. Never have there been so many complaints about our pension system; about the state pension falling behind earnings, about the misselling of personal pensions, about the perceived poor value of annuities, and about high charges and poor investment performance. This new edition of Pension Schemes and Pension Funds in the United Kingdom provides the latest information on all the key state and private pension schemes operating in the UK, including: the basic state pension, minimum income guarantee and pension credit; the state second pension; company pension schemes; and personal and stakeholder pension schemes. It does this within the context of the long historical development of the UK pensions system since medieval times. It also examines government pensions policy over the last twenty years, in particular the reduction in state pensions and the transfer of the burden of pension provision to the funded private sector. It also examines future trends and future concerns, such as increasing longevity and the adequacy of savings for retirement when people are young and in work. As most pension schemes are funded, the author also examines the latest issues in pension funding, such as the new accounting standard FRS17, active and passive fund management, investment risk budgeting and management, global investment performance standards, short-termism and the Myners review of institutional investment. The book concludes with a proposal for the Ideal Pension Scheme.

edited by William M. Pardridge, 486 pp., ill., New York, NY, Cambridge University Press, 1998, $135.00 There are certain concepts that form the basic fund of scientific knowledge important to both clinicians and researchers in neurosciences. The majority would most likely nod knowingly if the terms “selective vulnerability” or “blood–brain barrier” were mentioned, but if asked to define either one, would likely falter or produce a garbled definition. That no longer need be the case, at least for the blood–brain barrier, for Dr. Pardridge has assembled an international group of basic scientists, pathologists, and clinicians, each of whom has produced a brief chapter focusing on a specific issue, thus creating a comprehensive book elucidating all important aspects of the subject. The book is divided into five parts that follow a superb introductory chapter by Dr. Pardridge. Chapters 2 through 17 deal with methodology, some of which provide technical details that will not be of interest to all readers but are of great value to those who wish to use these techniques. Some authors go beyond simply discussing the facts per se. For example, Cornford introduces his chapter with a brief and fascinating historical review of the development of the carotid artery single injection technique. Part II consists of nine chapters that address various aspects of transport biology. Each of these is a gem and should be required reading for clinical neuroscientists, even though some contain complex biochemistry. There are four sections in Part III, each of which focuses attention on general aspects of CNS transport. These four chapters are worth the price of the book. One describes the blood–CSF barrier and the choroid plexus; the next discusses the role of the leptomeninges and includes a brief history of how the two separate membranes acquired their names. The other two chapters, …

The key twin objectives of pension and retirement system are income security and consumption smoothing for members and their family (heirs). Accordingly, pension funds worldwide devise laws that preserve and improve these key objectives. Laws that failed to take into account these objectives not only impose extra financial burden on the pension system, but also may pose undesirable social and economic effects. In this respect, economic analysis of pension laws would help lawmakers to make workable and implementable laws. Generally, economic analysis of law seeks to answer two basic questions regarding legal rules: what are the effects of legal rules on the behavior of relevant actors? And are these effects socially desirable? This paper examines the pension law of Iran’s civil servant pension fund (CSPF) for female heirs in light of the afore-mentioned key objectives of pension system, and from social justice point of view. The results from the analysis reveal that this does not only adhere to social justice and pension system’s main purpose, but also it imposes economic and social costs. The weak side of the law also creates financial burden on the pension fund, the young generation (paying pension benefits to the considered heirs from its contribution) and the public at large. The study also shows that life time payment of pensions to heirs by CSPF encourages late or informal marriages hence defecting acceptable social norms and may increase informal labor supply, creating a further problem in the labor market. The study thus recommends the need for reforming the existing law and rules of CSPF for female heirs.

Universities internationally have recently increased their campuses to attract a broader coverage of students in a very competitive university education market (e.g. international students). This has seen many universities establish a Central Business District (CBD) office presence via vertical campuses in addition to their traditional campuses. To take advantage of the digital era, a key ingredient in this university space is smaller technology-enhanced teaching spaces in these vertical campuses rather than traditional large lecture theatres. Universities have considered a range of options to access this vertical campus office space, with the attractiveness of universities as major office space tenants and university education assets now being critically assessed as a potential real estate sector for investors; for example, included in a real estate fund. Using an extensive stakeholder survey of Australian universities, pension funds, real estate funds and appraisers, critical issues in the successful operation and management of vertical campus office assets are assessed for these various stakeholders in the vertical campus office asset management process in the digital age. Specific strategic and practical management issues for these vertical campus office assets as a real estate sector in this fourth Industrial Revolution and universities as major office space tenants are highlighted.

2024 was an exceptionally successful year for Austrian pension and provision funds. Domestic pension funds achieved a top result with a performance of 7.77 percent. The provision funds (Abfertigung Neu) also achieved a very pleasing result with an average performance of 4.72 percent. The domestic pension funds manage assets of 29.04 billion euros. On average, the 155,000 beneficiaries received a monthly supplementary pension of EUR 417 in the previous year (14 times per year). At 5.03 percent, the long-term performance of the eight Austrian pension funds is also clearly better than that of numerous other forms of investment. In addition, the investment strategy places great emphasis on the aspect of sustainability. As the largest private pension payer in Austria, the Austrian pension funds are a central component of the Austrian pension system. The Austrian provision funds (Abfertigung NEU) also achieved a very successful result in the past financial year. On average, this will be 4.72 percent in 2024. Long-term stability is always at the forefront of the investment strategy. The Austrian provision funds currently manage assets of EUR 21.3 billion for around 3.98 million beneficiaries. Due to the withdrawal options in the occupational pension system, the pension funds must constantly reckon with capital outflows, which makes even more conservative investment necessary.

PurposeThis study aims to explore the views of pension beneficiaries and fund managers regarding greater involvement and investment autonomy and the attitudes toward diverse responsible investment criteria. The conventional form of investing is usually vulnerable to high financial market volatility events and financial crises, and most importantly, it has proven insufficient in addressing important social issues. A newly introduced investment culture known as impact investing strives for social gains in the long term rather than the maximization of financial returns by aiming to tackle social problems. However, some in the field claim that implementing such investment policies compromises the fiduciary responsibility of pension funds’ trustees to manage trust funds in the best interest of beneficiaries.Design/methodology/approachThis study uses qualitative methods to explore the perception of proposed pension policies, such as beneficiaries’ greater involvement in determining pension investment policies that can have a positive long-term impact on their lives and on the provision of investment autonomy. For this purpose, the study investigates beneficiaries’ positions regarding responsible investment criteria from a freedom-of-choice perspective. The study sample consists of members and managers of a Dutch pension administrative organization with a cooperative structure. Three semi-structured, homogeneous discussions with focus groups containing between seven and nine participants each are conducted. The data are coded both deductively and inductively, following the framework approach, which is a qualitative data analysis method.FindingsParticipants demonstrate positive attitudes toward greater involvement and freedom of choice. However, the findings also indicate that members and pension fund managers have different views regarding responsible investment criteria. Members have more favorable attitudes toward responsible investment than do managers.Research limitations/implicationsThis research is limited to focus group discussions with managers and members in the Dutch healthcare sector.Practical implicationsHow little the current pension system matches people’s investment preferences is a matter of concern, and the main implications of this research thus center upon designing a more democratic pension system for the future. Greater involvement by pension fund beneficiaries, whose roles are currently limited, would help legitimize responsible investing. This research implies that pension policies should be designed to align with the preferences of pension fund beneficiaries and be accompanied by diverse intervention strategies.Social implicationsPension reforms that encourage pension beneficiaries to exert greater influence in determining pension policy will help shrink the democratic deficit in collective pensions.Originality/valueThis study contributes to the literature on pension fund governance and long-term responsible investing by examining the attitudes toward impact and sustainable investments and by making suggestions for future research. To the best of the authors' knowledge, this study is the first to investigate the attitudes of pension fund participants toward targeted impact investments.

In Ukraine, the problem of building an effective system of social protection that can respond quickly to modern economic processes, provide citizens with a decent life, guarantee pensions and other social benefits at the level of market realities and state social standards remains one of the important objectives of public policy. The subject of the study is the pension insurance system in Ukraine, the activities of insurance companies in the pension system. The aim of the research is to study the theoretical foundations and practical aspects of pension insurance, the functioning of the Pension Fund of Ukraine and private pension funds, the formation and use of their funds and justify possible ways to improve the pension insurance system in Ukraine. to international standards. In accordance with the set goal, the following tasks were identified: to characterize the theoretical foundations of the functioning and development of pension insurance in Ukraine; to study the experience of reforming the pension systems of foreign countries, to analyze the current state of the pension system in Ukraine; to characterize the problems of development of non-state pension insurance and to develop measures to intensify pension insurance programs taking into account international experience; to determine the directions of integration of the pension system of Ukraine into the European and world pension system. The scientific novelty of the obtained results lies in the substantiation of theoretical and methodological strategic development of the pension insurance system in Ukraine, which allowed to obtain practical and theoretical results that contain scientific novelty, in particular the prospects of its development in modern conditions. The most significant scientific results of the research, which are marked by novelty, are the following: the main positive properties of the accumulative system of state pension insurance are summarized, namely: the ability to strengthen the motivational factors of the population to participate in pension insurance. In this system, there is a much closer link between the contributions made and the pension benefits received than in the solidarity pension system, which makes it possible to weaken paternalistic sentiments in society; the structure of such a mechanism of state regulation of financial support of the pension system is generalized, which includes a set of institutional and technological interconnected blocks, created based on the goals and directions of state management of the pension system; It is substantiated that the further development of private pension provision can reduce the burden on the state pension insurance in the future and supplement it with new pension insurance schemes, which are not available to the population in the mandatory state pension insurance. The intensification of the activity of the system of non-state pension funds and the accumulative pension fund will become a significant source of investment resources in the economy of Ukraine and will contribute to ensuring its financial security. The practical significance of the obtained results is to develop and provide recommendations on the peculiarities of the development of pension insurance and areas of reform.