Actuaries, Pension Funds and Investment

1992 ◽  
Vol 43 ◽  
pp. 125-166
Author(s):  
T. G. Arthur ◽  
P. A. Randall
Keyword(s):  
Decision Making ◽  
Asset Allocation ◽  
Performance Monitoring ◽  
Pension Fund ◽  
Pension Funds ◽  
Investment Performance ◽  
Institutional Investment ◽  
Fund Investment

AbstractThe authors discuss the investment of pension and other institutional funds, stressing a theme of investing to meet liabilities. Their aim is to stimulate debate by actuaries and the investment community, leading to the development of better approaches to pension fund investment and its monitoring.The first part of the paper considers the matching of assets to liabilities, concentrating on a major principle applicable to actuarial valuations where assets and liabilities are mismatched.The paper goes on to consider principles of institutional investment and includes discussions of the meaning and measurement of risk, the setting of investment objectives, decision-making, asset allocation and investment performance monitoring.

Actuaries, pension funds and investment

1990 ◽  
Vol 117 (1) ◽  
pp. 1-49 ◽  
Author(s):  
T. G. Arthur ◽  
P. A. Randall
Keyword(s):  
Decision Making ◽  
Asset Allocation ◽  
Performance Monitoring ◽  
Pension Fund ◽  
Pension Funds ◽  
Investment Performance ◽  
Institutional Investment ◽  
Fund Investment

AbstractThe authors discuss the investment of pension and other institutional funds. stressing a theme of investing to meet liabilities. Their aim is to stimulate debate by actuaries and the investment community, leading to the development of better approaches to pension fund investment and its monitoring.The first part of the paper considers the matching of assets to liabilities, concentrating on a major principle applicable to actuarial valuations where assets and liabilities are mismatched.The paper goes on to consider principles of institutional investment and includes discussions of the meaning and measurement of risk, the setting of investment objectives, decision-making, asset allocation and investment performance monitoring.

scholarly journals DETERMINANTS INFLUENCING PENSION FUND INVESTMENT PERFORMANCE IN KENYA

2018 ◽  
Vol 3 (1) ◽  
pp. 14
Author(s):  
Anthony Kyanesa Mutula ◽  
Dr. Assumptah Kagiri
Keyword(s):  
Pension Fund ◽  
Multiple Linear Regression Model ◽  
Target Population ◽  
Pension Funds ◽  
Primary Data ◽  
Investment Strategies ◽  
Investment Performance ◽  
Descriptive Research ◽  
Fund Investment ◽  
Regulation Compliance

Purpose: The purpose of the study was to investigate the determinants influencing pension fund investment performance in Kenya.Methodology: The study employed a descriptive research design. The study target population was all the 33 registered pension funds in Kenya, and the sample size was 66 senior employees involved in decision making. The study adopted a census approach and therefore data was collected from all the 33 registered pension funds. A questionnaire was used to collect primary data from the selected respondents. The data collected was analyzed using the statistical package for social sciences (SPSS) version 23.0. The software was used to produce frequencies, descriptive and inferential statistics which was used to derive generalizations and conclusions regarding the population. Multiple linear regression model was used to measure the relationship between the independent variables and the dependent variable. The study findings were presented using figures and tables.Results: The study findings revealed a positive and significant relationship between diversification decisions, management competency, investment strategies, regulation compliance and investment performance of pension funds in Kenya.Unique contribution to theory, practice and policy: The study recommended that the management of pension funds should establish a strong organization structure and policy implementation, which will enhance their portfolio composition; the firms should have highly competent management; should incorporate investment literacy and capability programs in their organizations; and should continue adhering to the set regulations.

Challenging investment decision-making in pension funds

2019 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Carl-Christian Trönnberg ◽  
Sven Hemlin
Keyword(s):  
Decision Making ◽  
Critical Incident ◽  
Pension Fund ◽  
Investment Decision ◽  
Investment Decisions ◽  
Pension Funds ◽  
Content Type ◽  
Fund Managers ◽  
Intuitive Thinking ◽  
Investment Decision Making

PurposeThe purpose of this study was to gain a better understanding of pension fund managers investment thinking when confronted with challenging investment decisions. The study focuses on the theoretical question of how dual thinking processes in experts’ investment decision-making emerge. This question has attracted interest in economic psychology but has not yet been answered. Here, it is explored in the context of pension funds.Design/methodology/approachThe sample included 22 pension fund managers. The authors explored their decision-making by applying the critical incident interview technique, which entailed collecting investment decisions that fund managers retrieved from recent memory (Flanagan, 1954). Questions concerned the investment situation, the decision-making process and the challenges and uncertainties the fund managers faced.FindingsMany of the 61 critical incidents examined concerned challenging (mostly stock) investments based on extensive analysis (e.g. reliance on external analysts for advice; analysis of massive amounts of hard company and stock market information; scrutiny of company reports and personal meetings with CEOs). However, fund managers to a high degree based their decisions on soft information judgments such as experience and qualitative judgements of teams. The authors found heuristics, intuitive thinking, biases (sunk cost effects) and social influences in investment decision-making.Research limitations/implicationsThe sample is small and not randomly selected.Practical implicationsThe authors suggest anti-bias training and better acquaintance with human forecasting limitations for pension fund managers.Originality/valuePension fund managers’ investment thinking has not previously been investigated. The authors show the types of investment situations in which analytical and intuitive thinking and biases occur.

An investigation of property-related decision practice of Australian fund managers

2014 ◽  
Vol 32 (3) ◽  
pp. 282-305 ◽  
Author(s):  
Wejendra Reddy ◽  
David Higgins ◽  
Ron Wakefield
Keyword(s):  
Decision Making ◽  
Asset Allocation ◽  
Continuous Process ◽  
Decision Making Process ◽  
Allocation Decision ◽  
Content Type ◽  
Fund Managers ◽  
Investment Level ◽  
Fund Investment ◽  
Managed Funds

Purpose – In Australia, the A$2.2 trillion managed funds industry including the large pension funds (known locally as superannuation funds) are the dominant institutional property investors. While statistical information on the level of Australian managed fund investments in property assets is widely available, comprehensive practical evidence on property asset allocation decision-making process is underdeveloped. The purpose of this research is to identify Australian fund manager's property asset allocation strategies and decision-making frameworks at strategic level. Design/methodology/approach – The research was undertaken in May-August 2011 using an in-depth semi-structured questionnaire administered by mail. The survey was targeted at 130 leading managed funds and asset consultants within Australia. Findings – The evaluation of the 79 survey respondents indicated that Australian fund manager's property allocation decision-making process is an interactive, sequential and continuous process involving multiple decision-makers (internal and external) complete with feedback loops. It involves a combination of quantitative analysis (mainly mean-variance analysis) and qualitative overlay (mainly judgement, or “gut-feeling”, and experience). In addition, the research provided evidence that the property allocation decision-making process varies depending on the size and type of managed fund. Practical implications – This research makes important contributions to both practical and academic fields. Information on strategic property allocation models and variables is not widely available, and there is little guiding theory related to the subject. Therefore, the conceptual frameworks developed from the research will help enhance academic theory and understanding in the area of property allocation decision making. Furthermore, the research provides small fund managers and industry practitioners with a platform from which to improve their own property allocation processes. Originality/value – In contrast to previous property decision-making research in Australia which has mainly focused on strategies at the property fund investment level, this research investigates the institutional property allocation decision-making process from a strategic position involving all major groups in the Australian managed funds industry.

scholarly journals Social Investment by Union-Based Pension Funds and Labour-Sponsored Investment Funds in Canada

2002 ◽  
Vol 56 (1) ◽  
pp. 92-115 ◽  
Author(s):  
Jack Quarter ◽  
Isla Carmichael ◽  
Jorge Sousa ◽  
Susan Elgie
Keyword(s):  
Pension Fund ◽  
National Sample ◽  
Pension Funds ◽  
Investment Strategies ◽  
Social Investment ◽  
Investment Funds ◽  
Fund Investment

Summary This study has two objectives: first, to understand the extent of social investment among union-based pension funds as well as labour-sponsored investment funds in Canada; second, to understand the factors that affect social investment strategies among such funds. A national sample of 189 pension funds with assets of at least $50 million was drawn from the Canadian Pension Fund Investment Directory (Toronto: Maclean Hunter). The sample also included 10 labour-sponsored investment funds, half the number of such funds in Canada. The data indicate that pension funds in Canada have minimal social investment. There is somewhat higher social investment among labour-sponsored investment funds, and particularly labour-sponsored investment funds with genuine union sponsorship. The study also explored factors related to social investment by funds.

scholarly journals Let the Chickens Run the Henhouse? Democratizing Pension Funds: Corporate Governance and Accountability by Ronald B. Davis

2009 ◽  
pp. 285-290
Author(s):  
Randy Bauslaugh
Keyword(s):  
Decision Making ◽  
Corporate Governance ◽  
Pension Fund ◽  
Pension Funds ◽  
Environmental Responsibility ◽  
Central Thesis ◽  
Potential Benefits ◽  
Fund Governance

The central thesis of this interesting, but clearly labour biased book, is that employees or plan beneficiaries ought to exercise greater decision-making control over the pension funds they participate in. In this way, Professor Ronald Davis argues, investee corporations can be influenced to behave with greater social, ethical, financial, and environmental responsibility. Notwithstanding its arguably optimistic if not naïve view of the potential benefits of democratizing pension fund governance, this book deals with many themes that highlight deficiencies in governance and accountability that many practitioners in the pension industry would likely admit should be addressed.

Rethinking Pension Fund Investment Strategies

1994 ◽  
Vol 9 (3) ◽  
pp. 397-409 ◽  
Author(s):  
E. Richard Brownlee ◽  
S. Brooks Marsha
Keyword(s):  
Financial Reporting ◽  
Pension Fund ◽  
Pension Plan ◽  
Pension Funds ◽  
Investment Strategies ◽  
Fixed Income ◽  
Fixed Income Securities ◽  
Economic Entity ◽  
Tax Arbitrage ◽  
Fund Investment

This paper addresses the need for companies to reexamine their pension fund investment strategies because of certain changes that occurred during the 1980s that enhanced the attractiveness of fixed-income securities. Of primary importance was the issuance of a new pension accounting standard that substantially changed the determination of annual pension expense, pension plan asset and liability recognition, and pension footnote disclosures. Both the concepts and the information resulting from the pension standard have promoted a more integrative perspective of the relationship between pension funds and their corporate sponsors. This broadened perception of companies and their pension funds comprising a single economic entity has important financial consequences for corporate managements and capital providers. One such consequence pertains to pension portfolios. Fixed-income securities become a more desirable pension fund investment for two principal reasons: they reduce financial reporting risk without increasing economic risk and they are an integral component of corporate tax arbitrage, a strategy initially proposed by Fischer Black in the early 1980s.

Sign in / Sign up

Export Citation Format

Share Document