Two different paths to sustainability? A comparison of a Finnish and a Swedish public pension reserve fund

2021 ◽  
Vol 23 (3) ◽  
pp. 298-317
Author(s):  
Niko Väänänen
Keyword(s):  
System Design ◽  
Significant Role ◽  
Comparative Research ◽  
Pension Fund ◽  
Pension System ◽  
Pension Funds ◽  
Public Pension ◽  
Responsible Investing ◽  
Reserve Fund ◽  
Investment Process

The role played by finance in allocating resources has become crucial in modern economies. Responsible Investing, i.e., the integration of non-financial criteria (such as environmental, social, and governance (ESG), negative/positive screening, and active ownership) into the investment process, has gained an important role. Does this apply to pension funds, too? This article compares two public pension reserve funds, one from Finland and one from Sweden, and describes their path towards responsible investments. The article shows that although having taken different paths, responsible investing has been clearly integrated into the investment process of both funds during the last decades. In Finland, the role played by pension fund insiders has been remarkable. In Sweden, legislators have played an active and significant role in the process. The design of the pension system equally plays an important role in the overall process. In Sweden, cooperation is promoted in responsible investments. In Finland, pension system design fosters competition, thereby reducing cooperation in investments. This article adds more information on the scarce comparative research on public pension reserve funds.

scholarly journals An actuarial mathematical model for a new pension philosophy. An application to the accountant pension fund

2020 ◽  
Vol 0 (0) ◽  
Author(s):  
Anna Attias ◽  
Simona Ciavalini ◽  
Carla Morrone ◽  
Daniela Saitta
Keyword(s):  
Mathematical Model ◽  
Social Welfare ◽  
Pension Fund ◽  
Pension System ◽  
Public Pension ◽  
Standard Of Living ◽  
Replacement Rate ◽  
Minimum Threshold ◽  
Public Pension System ◽  
Highly Correlated

AbstractThis paper adapts an actuarial mathematical model, built for the Italian public pension system, based on the law proposal 3035/2009 to the Accountant Pension Fund (CNPADC). The aim is to introduce a new philosophy pension highly correlated with the concept of adequacy for an ambitious social welfare; using the logic of the 3035/2009 proposal, which guarantees a minimum threshold for the replacement rate of the direct pension, this study provides a rigorous actuarial mathematical model that explains a sort of rate of contribution at a tendential equilibrium, in a pay-as-you-go pension system. This model reveals for which parameters it is possible to intervene to maintain the standard of living in retirement.

Institution of Banking Pension Provisions: Preconditions, Nature, Competition with Traditional Institutions

2015 ◽  
Vol 2015 (2) ◽  
pp. 27-55
Author(s):  
Yuriy Ezrokh
Keyword(s):  
Financial Institutions ◽  
Pension Fund ◽  
Pension System ◽  
Pension Reform ◽  
Banking System ◽  
Pension Funds ◽  
Econometric Analysis ◽  
Traditional Institutions ◽  
State Pension ◽  
Pension Benefits

The article analyzes the pension reform implemented in Russia in 2013–2014, provides the modeling of possible pensions, determines the efficiency boundaries for the use of insurance and savings-insurance schemes offered by the Pension Fund of Russia. The author examines the activities and effectiveness in managing pension savings and reserves from non-state pension funds, especially the system of voluntary savings insurance. The study identifies the challenges faced by these financial institutions, which constrain the development of the Russian pension system. Drawing on logical and econometric analysis the author identifies the competitive opportunity for banks to participate in the Pension Benefits Act, calculates the proposals’ efficiency for future retirees and the banking system as a whole, determines the contribution of the proposed solutions to enhanced competition and more competitive banking environment.

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.

scholarly journals DEVELOPMENT OF NON-STATE PENSION FUNDS OF UKRAINE: PROBLEMS AND PERSPECTIVES

2021 ◽  
Author(s):  
Natalya Tataryn ◽  
Kateryna Zakorko ◽  
Sofia Kozar
Keyword(s):  
Pension Fund ◽  
Pension System ◽  
Public Awareness ◽  
Pension Funds ◽  
The State ◽  
Private Pension ◽  
State Pension ◽  
Private Pension System ◽  
State Pension Funds ◽  
Legal Entities

The article considers topical issues of determining the current state of development of the private pension system in Ukraine, and defines the concept of "private pension fund". In economic essence, the system of non-state pension fund is defined as an integral part of the system of accumulative pension provision, based on voluntary participation of individuals and legal entities in the formation of pension savings in order to receive additional pension contributions. Problems that hinder the development of private pension funds, namely the shadowing of wages and labor relations, lack of public awareness, lack of legislation are identified. The functioning of private pension funds in the country depends not only on reforming the existing pension system, but also on the growth of incomes, their de-shadowing and development of the financial market in general. The current pension system is not able to provide the population with the necessary pension assets. This problem can be solved by intensifying the activities of private pension funds. Emphasis is placed on the need and importance of a voluntary private pension system and its role in ensuring the development of the state economy. As world experience shows, in a market economy, the development of private pension funds is one of the important components to ensure effective functioning of the state. Private pension funds are powerful investment investors because they can mobilize additional investment resources. The main purpose of investing pension assets is to preserve the savings of the population. The main indicators of activity of non-state pension funds are analyzed, namely: pension contributions, pension payments, the number of concluded pension contracts, the amount of investment income, etc. Further trends in the development of private pension provision in Ukraine are noted, substantiated the necessary measures to intensify activities in modern economic conditions, proposed recommendations for solving existing problems of institutions. However, in implementing the proposed measures should be remembered participation of both individuals and legal entities.

scholarly journals Value Judgments at the Heart of Green Transformation: The Leverage of Pension Fund Investors

2021 ◽  
pp. 1-20
Author(s):  
Monika Berg
Keyword(s):  
Pension Fund ◽  
Pension Funds ◽  
Public Pension ◽  
Investment Strategies ◽  
Transformative Change ◽  
Value Judgments ◽  
Trade Offs ◽  
Public Pension Fund ◽  
Investment Capital ◽  
Transformative Function

Abstract As the urgency for green transformation grows, the question of whether finance capital can be harnessed to promote green transformation has been raised. Public pension funds are of particular interest since they are publicly governed, have long-term interest, and are growing in proportion to the global investment capital. However, transformative change demands a reprioritization of fundamental values in terms of trade-offs among economic, environmental, and social ends. This article identifies shifts in value judgments in public pension fund investments and particularly focuses on the institutional constraints by which value (re)priorities are resisted by investigating Swedish public pension funds. While there are signs of environmental embedding of the economy, I also note neutralization of the role and investment strategies of the funds, which has a stabilizing rather than a transformative function. The neutralization constrains deep green transformation, which demands politicization of the role of institutional investors.

Pension beneficiaries’ and fund managers’ perceptions of responsible investment: a focus group study

2016 ◽  
Vol 16 (1) ◽  
pp. 1-20 ◽  
Author(s):  
George Apostolakis ◽  
Frido Kraanen ◽  
Gert van Dijk
Keyword(s):  
Focus Group ◽  
Pension Fund ◽  
Pension System ◽  
Freedom Of Choice ◽  
Investment Policies ◽  
Content Type ◽  
Responsible Investment ◽  
Fund Managers ◽  
Responsible Investing

Purpose This 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/approach This 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. Findings Participants 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/implications This research is limited to focus group discussions with managers and members in the Dutch healthcare sector. Practical implications How 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 implications Pension reforms that encourage pension beneficiaries to exert greater influence in determining pension policy will help shrink the democratic deficit in collective pensions. Originality/value This 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.

scholarly journals Pension Fund Corporate Engagement

2004 ◽  
Vol 59 (1) ◽  
pp. 142-171 ◽  
Author(s):  
Gordon L. Clark ◽  
Tessa Hebb
Keyword(s):  
Pension Fund ◽  
Pension Funds ◽  
Management Decision ◽  
Responsible Investing ◽  
Global Standards ◽  
Management Decision Making ◽  
Anglo American ◽  
Investment Portfolios ◽  
The Impact

Pension fund capitalism is a new, albeit evolving, stage of Anglo-American capital market development. It is marked by the ability of pension funds to aggregate the widely disbursed ownership of beneficiaries and therefore act as single entities with a unified voice. Pension funds within their investment portfolios are increasingly using this voice to engage companies. Such corporate engagement in its broadest definition is the use of one’s ownership position to influence company management decision making. Corporate engagement brings together four distinct underlying currents: first, the increased use of passive index funds; second, the corporate governance movement; third, the growing impact of socially responsible investing; and, finally, the impact of new global standards. At its best corporate engagement offers a long-term view of value that both promotes higher corporate, social and environmental standards and adds share value, thus providing long-term benefits to future pension beneficiaries.

scholarly journals Pension fund governance: The Polish experience

2014 ◽  
Vol 11 (3) ◽  
pp. 349-357
Author(s):  
Adam Samborski
Keyword(s):  
Pension Fund ◽  
Pension System ◽  
Pension Funds ◽  
Small Fragment ◽  
Fund Management ◽  
Pension Systems ◽  
Pension Fund Management ◽  
Polish Experience ◽  
Fund Governance

Despite a comprehensive pension related debate held on the governmental level and in media in Poland, little time was spent, however, on discussing nature and usefulness of governance in the context of pension systems aimed at would-be-pensioners. Attention is predominantly paid to the role of governance for investments. Unfortunately, governance is not addressed, with reference to pension funds, the way it should be. The author is looking for answers to questions about the state of pension fund governance in Poland, thus trying to find methods for improvement. Nevertheless, this text concentrates on a small fragment of the pension system in Poland. The article aims at attempting identification of issues to be faced by governance in voluntary pension funds that are managed by universal pension fund management companies.

scholarly journals Alternatives to Serve the Interests of Russian Pensioners

2020 ◽  
Author(s):  
Elena Ivanovna Kulikova
Keyword(s):  
Growth Rate ◽  
Labor Market ◽  
Older People ◽  
Pension Fund ◽  
Statistical Data ◽  
Pension System ◽  
Pension Funds ◽  
Living Standards ◽  
Retirement Age ◽  
Negative Phenomena

The results of the analysis of statistical data on the Russian labor market, employment and wages, as well as the specific features of the Russian pension system, provide the basis for several important conclusions. Firstly, the living standards of the majority of Russian pensioners do not meet their needs as the Russian pension system is focused on the achievement of minimum living standards. Secondly, the regulation on the functioning of the pension system established by Russian legislation is often violated by the regulators without coordination with economic entities and citizens, participants of the pension system, which prevents future pensioners from feeling protected upon retirement. For this reason, citizens of the retirement age do not seek to retire even when they reach the retirement age. The growth rate of working pensioners (who pay taxes, including insurance deductions to the Pension Fund of Russia and private pension funds) confirms this. Thirdly, there is a need to create a socially-comfortable environment for pensioners, to counteract the psychological problems of older people their sense of “uselessness” to society. The article proposes practical measures to mitigate the negative phenomena in the pension provision of Russian citizens.

scholarly journals Public Pension Fund Structure And Mechanisms: A Case Study Of The Tanzanian Pension Funds System

2017 ◽  
Vol 1 (1) ◽  
pp. 135
Author(s):  
Zubeda Chande Mpinga ◽  
Wim Westerman
Keyword(s):  
Pension Fund ◽  
Good Governance ◽  
Conflicts Of Interest ◽  
Pension Funds ◽  
Board Of Trustees ◽  
Public Pension ◽  
Special Focus ◽  
The Government ◽  
High Standards ◽  
And Performance

Good governance structures have become an issue of public interest, including public pension systems. This study assesses the pension funds governance in Tanzania, with a special focus on board of trustees’ issues. The growing interest referred to, is partly because the quality and performance of the funds trustees determines the income flows to which members are entitled and promised, as well as any shortfalls thereof, that may require interventions. Our findings suggest that board of trustees play an important role for funds governance and hence performance. The pension fund structure and mechanisms in Tanzania uphold high standards. Yet, a major issue is that the board selection seems to be politically motivated and that the government claims most board seats, making conflicts of interest likely to occur repeatedly. 

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