Pension Risk and Risk-Based Supervision in Defined Contribution Pension Funds
Defined contribution pension systems have faced criticism in the wake of the financial and economic crisis for not delivering adequate and sustainable pension incomes at retirement. Much of the problem has centered around the misalignment of pensio...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2014/03/19288694/pension-risk-risk-based-supervision-defined-contribution-pension-funds http://hdl.handle.net/10986/18355 |
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okr-10986-18355 |
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oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English en_US |
| topic |
ACCESS TO CAPITAL ACCOUNTING ANNUAL RETURNS APR ASSET ALLOCATION ASSET CLASS ASSET MANAGEMENT ASSET MANAGERS AVERAGE INTEREST AVERAGE INTEREST RATE BANK DEPOSITS BANK POLICY BANKING INDUSTRY BANKS BASIC PENSION BASIS POINTS BOND RATES BONDS BOOK ENTRY CAPITAL ADEQUACY CAPITAL MARKET CAPITAL REQUIREMENT CAPITAL REQUIREMENTS CENTRAL BANK CENTRAL DEPOSITORY CONSERVATIVE INVESTMENT CONTRIBUTION CONTRIBUTION RATE CONTRIBUTION SCHEMES CONTRIBUTION SYSTEMS CONTRIBUTIONS CORPORATE GOVERNANCE CREDITORS CUSTODIAN BANK DEFINED BENEFIT PENSION DEFINED CONTRIBUTION PENSION DEPOSIT DERIVATIVE DERIVATIVE INSTRUMENTS DERIVATIVE PRODUCTS DERIVATIVES EARNINGS ELIGIBLE INSTRUMENTS EMERGING ECONOMIES EMERGING MARKETS EQUITIES EQUITY INSTRUMENTS EQUITY MARKETS FINANCIAL EDUCATION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL LITERACY FINANCIAL PERFORMANCE FINANCIAL SECTOR FINANCIAL STATEMENTS FIXED INCOME FIXED INCOME PORTFOLIO FRAUD FUND MANAGEMENT FUND MANAGERS FUTURE VALUE GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GOVERNMENT BOND GOVERNMENT BONDS GOVERNMENT GUARANTEES GOVERNMENT SECURITIES HOLDING INCOME INSTRUMENTS INFLATION INFLATION LINKED BONDS INFLATION RATE INFORMATION SYSTEMS INSURANCE INSURANCE COMPANIES INSURANCE PRODUCTS INTEREST RATE INTEREST RATE RISK INTEREST RATES INTERNAL AUDITS INTERNATIONAL BANK INVESTING INVESTMENT ALTERNATIVES INVESTMENT COMPANIES INVESTMENT COMPANY INVESTMENT DECISIONS INVESTMENT GUIDELINES INVESTMENT MANAGEMENT INVESTMENT PERFORMANCE INVESTMENT POLICIES INVESTMENT PROCESS INVESTMENT REGULATION INVESTMENT REGULATIONS INVESTMENT RESTRICTIONS INVESTMENT RETURNS INVESTMENT RISK INVESTMENT RISKS INVESTMENT STRATEGIES INVESTMENT STRATEGY LABOR FORCE LARGE COMPANIES LEGAL FRAMEWORK LEVEL OF CONTRIBUTIONS LIQUID ASSETS LIQUIDITY LIQUIDITY RISK LONG-TERM GOAL LONG-TERM INVESTORS MANDATORY PENSION FUNDS MARGIN REQUIREMENTS MARK-TO-MARKET MARKET DISCIPLINE MARKET FAILURE MARKET FAILURES MARKET OVERSIGHT MARKET PARTICIPANTS MARKET PRACTICES MARKET RISK MARKET SURVEILLANCE MATURITIES MATURITY MINIMUM CAPITAL REQUIREMENT MONETARY POLICY MONIES MUTUAL FUNDS NOMINAL YIELD PENSION PENSION ASSET PENSION ASSETS PENSION AT RETIREMENT PENSION BENEFITS PENSION FUND PENSION FUND ASSETS PENSION FUNDS PENSION INCOME PENSION INCOMES PENSION INVESTMENT PENSION PLAN PENSION PLANS PENSION PROVIDERS PENSION REFORMS PENSION SCHEMES PENSION SECTOR PENSION SYSTEM PENSION SYSTEMS PENSIONERS PENSIONS PERFORMANCE MEASUREMENT PORTFOLIO PORTFOLIO ALLOCATION PORTFOLIO ALLOCATIONS PORTFOLIO CHOICE PORTFOLIO PERFORMANCE PORTFOLIOS PORTFOLIOS OF PENSION FUNDS PRIVATE PENSION PRIVATE PENSION FUND PROBABILITY PROTECTION OF INVESTORS PRUDENTIAL REGULATION PRUDENTIAL STANDARD RATE OF INFLATION RATE OF RETURN RATES OF RETURN RATES OF RETURNS REGULATORY AUTHORITY REGULATORY FRAMEWORK REINVESTMENT REINVESTMENT RISK REPLACEMENT RATE REPLACEMENT RATES RESEARCH ASSISTANCE RESERVE RESERVE REQUIREMENT RESERVE REQUIREMENTS RESERVES RETIREMENT RETIREMENT AGE RETIREMENT INCOME RETURN RETURNS RISK ASSESSMENT RISK BEHAVIOR RISK MANAGEMENT RISK MANAGEMENT SYSTEM RISK MANAGEMENT SYSTEMS RISK PROFILE RISK PROFILES SECURE PENSIONS SECURITIES TRANSACTIONS SENIOR SETTLEMENT SHAREHOLDER SHAREHOLDERS SHORT-TERM INTEREST RATES SOLVENCY STOCK MARKET SUPERVISORY AGENCIES SUPERVISORY AGENCY SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY TERM DEPOSITS TRADING TRANSPARENCY TREASURY TREASURY RATES TRUSTEES TYPES OF INVESTMENTS TYPES OF PENSION USE OF DERIVATIVES VALUABLE VALUATION VALUATIONS VALUE OF CONTRIBUTIONS VALUE OF PENSIONS WAGE YIELD CURVE YIELD CURVES |
| spellingShingle |
ACCESS TO CAPITAL ACCOUNTING ANNUAL RETURNS APR ASSET ALLOCATION ASSET CLASS ASSET MANAGEMENT ASSET MANAGERS AVERAGE INTEREST AVERAGE INTEREST RATE BANK DEPOSITS BANK POLICY BANKING INDUSTRY BANKS BASIC PENSION BASIS POINTS BOND RATES BONDS BOOK ENTRY CAPITAL ADEQUACY CAPITAL MARKET CAPITAL REQUIREMENT CAPITAL REQUIREMENTS CENTRAL BANK CENTRAL DEPOSITORY CONSERVATIVE INVESTMENT CONTRIBUTION CONTRIBUTION RATE CONTRIBUTION SCHEMES CONTRIBUTION SYSTEMS CONTRIBUTIONS CORPORATE GOVERNANCE CREDITORS CUSTODIAN BANK DEFINED BENEFIT PENSION DEFINED CONTRIBUTION PENSION DEPOSIT DERIVATIVE DERIVATIVE INSTRUMENTS DERIVATIVE PRODUCTS DERIVATIVES EARNINGS ELIGIBLE INSTRUMENTS EMERGING ECONOMIES EMERGING MARKETS EQUITIES EQUITY INSTRUMENTS EQUITY MARKETS FINANCIAL EDUCATION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL LITERACY FINANCIAL PERFORMANCE FINANCIAL SECTOR FINANCIAL STATEMENTS FIXED INCOME FIXED INCOME PORTFOLIO FRAUD FUND MANAGEMENT FUND MANAGERS FUTURE VALUE GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GOVERNMENT BOND GOVERNMENT BONDS GOVERNMENT GUARANTEES GOVERNMENT SECURITIES HOLDING INCOME INSTRUMENTS INFLATION INFLATION LINKED BONDS INFLATION RATE INFORMATION SYSTEMS INSURANCE INSURANCE COMPANIES INSURANCE PRODUCTS INTEREST RATE INTEREST RATE RISK INTEREST RATES INTERNAL AUDITS INTERNATIONAL BANK INVESTING INVESTMENT ALTERNATIVES INVESTMENT COMPANIES INVESTMENT COMPANY INVESTMENT DECISIONS INVESTMENT GUIDELINES INVESTMENT MANAGEMENT INVESTMENT PERFORMANCE INVESTMENT POLICIES INVESTMENT PROCESS INVESTMENT REGULATION INVESTMENT REGULATIONS INVESTMENT RESTRICTIONS INVESTMENT RETURNS INVESTMENT RISK INVESTMENT RISKS INVESTMENT STRATEGIES INVESTMENT STRATEGY LABOR FORCE LARGE COMPANIES LEGAL FRAMEWORK LEVEL OF CONTRIBUTIONS LIQUID ASSETS LIQUIDITY LIQUIDITY RISK LONG-TERM GOAL LONG-TERM INVESTORS MANDATORY PENSION FUNDS MARGIN REQUIREMENTS MARK-TO-MARKET MARKET DISCIPLINE MARKET FAILURE MARKET FAILURES MARKET OVERSIGHT MARKET PARTICIPANTS MARKET PRACTICES MARKET RISK MARKET SURVEILLANCE MATURITIES MATURITY MINIMUM CAPITAL REQUIREMENT MONETARY POLICY MONIES MUTUAL FUNDS NOMINAL YIELD PENSION PENSION ASSET PENSION ASSETS PENSION AT RETIREMENT PENSION BENEFITS PENSION FUND PENSION FUND ASSETS PENSION FUNDS PENSION INCOME PENSION INCOMES PENSION INVESTMENT PENSION PLAN PENSION PLANS PENSION PROVIDERS PENSION REFORMS PENSION SCHEMES PENSION SECTOR PENSION SYSTEM PENSION SYSTEMS PENSIONERS PENSIONS PERFORMANCE MEASUREMENT PORTFOLIO PORTFOLIO ALLOCATION PORTFOLIO ALLOCATIONS PORTFOLIO CHOICE PORTFOLIO PERFORMANCE PORTFOLIOS PORTFOLIOS OF PENSION FUNDS PRIVATE PENSION PRIVATE PENSION FUND PROBABILITY PROTECTION OF INVESTORS PRUDENTIAL REGULATION PRUDENTIAL STANDARD RATE OF INFLATION RATE OF RETURN RATES OF RETURN RATES OF RETURNS REGULATORY AUTHORITY REGULATORY FRAMEWORK REINVESTMENT REINVESTMENT RISK REPLACEMENT RATE REPLACEMENT RATES RESEARCH ASSISTANCE RESERVE RESERVE REQUIREMENT RESERVE REQUIREMENTS RESERVES RETIREMENT RETIREMENT AGE RETIREMENT INCOME RETURN RETURNS RISK ASSESSMENT RISK BEHAVIOR RISK MANAGEMENT RISK MANAGEMENT SYSTEM RISK MANAGEMENT SYSTEMS RISK PROFILE RISK PROFILES SECURE PENSIONS SECURITIES TRANSACTIONS SENIOR SETTLEMENT SHAREHOLDER SHAREHOLDERS SHORT-TERM INTEREST RATES SOLVENCY STOCK MARKET SUPERVISORY AGENCIES SUPERVISORY AGENCY SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY TERM DEPOSITS TRADING TRANSPARENCY TREASURY TREASURY RATES TRUSTEES TYPES OF INVESTMENTS TYPES OF PENSION USE OF DERIVATIVES VALUABLE VALUATION VALUATIONS VALUE OF CONTRIBUTIONS VALUE OF PENSIONS WAGE YIELD CURVE YIELD CURVES Randle, Tony Rudolph, Heinz P. Pension Risk and Risk-Based Supervision in Defined Contribution Pension Funds |
| relation |
Policy Research Working Paper;No. 6813 |
| description |
Defined contribution pension systems
have faced criticism in the wake of the financial and
economic crisis for not delivering adequate and sustainable
pension incomes at retirement. Much of the problem has
centered around the misalignment of pension fund management
companies and the interests of pension fund members, with
the focus on short-term volatility rather than delivering
adequate pension income over the long term. Although pension
fund supervisors in emerging economies have attempted to
correct for these market failures, they have not focused
sufficiently on the ultimate long-term pension income
objective. The paper suggests that in order to have a
meaningful impact on future pensions, the supervision of
defined contribution pension systems needs to take a more
proactive role in minimizing pension risk. This objective
would require ensuring that investment risks are aligned
with the probability of achieving a target pension at
retirement age. The paper also suggests that a proper
institutional design of the pension fund industry and
intensive use of market surveillance are efficient tools for
dealing with most of the operational risks of funded pension
fund schemes in emerging economies. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Randle, Tony Rudolph, Heinz P. |
| author_facet |
Randle, Tony Rudolph, Heinz P. |
| author_sort |
Randle, Tony |
| title |
Pension Risk and Risk-Based Supervision in Defined Contribution Pension Funds |
| title_short |
Pension Risk and Risk-Based Supervision in Defined Contribution Pension Funds |
| title_full |
Pension Risk and Risk-Based Supervision in Defined Contribution Pension Funds |
| title_fullStr |
Pension Risk and Risk-Based Supervision in Defined Contribution Pension Funds |
| title_full_unstemmed |
Pension Risk and Risk-Based Supervision in Defined Contribution Pension Funds |
| title_sort |
pension risk and risk-based supervision in defined contribution pension funds |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2014/03/19288694/pension-risk-risk-based-supervision-defined-contribution-pension-funds http://hdl.handle.net/10986/18355 |
| _version_ |
1764441544213921792 |
| spelling |
okr-10986-183552021-04-23T14:03:46Z Pension Risk and Risk-Based Supervision in Defined Contribution Pension Funds Randle, Tony Rudolph, Heinz P. ACCESS TO CAPITAL ACCOUNTING ANNUAL RETURNS APR ASSET ALLOCATION ASSET CLASS ASSET MANAGEMENT ASSET MANAGERS AVERAGE INTEREST AVERAGE INTEREST RATE BANK DEPOSITS BANK POLICY BANKING INDUSTRY BANKS BASIC PENSION BASIS POINTS BOND RATES BONDS BOOK ENTRY CAPITAL ADEQUACY CAPITAL MARKET CAPITAL REQUIREMENT CAPITAL REQUIREMENTS CENTRAL BANK CENTRAL DEPOSITORY CONSERVATIVE INVESTMENT CONTRIBUTION CONTRIBUTION RATE CONTRIBUTION SCHEMES CONTRIBUTION SYSTEMS CONTRIBUTIONS CORPORATE GOVERNANCE CREDITORS CUSTODIAN BANK DEFINED BENEFIT PENSION DEFINED CONTRIBUTION PENSION DEPOSIT DERIVATIVE DERIVATIVE INSTRUMENTS DERIVATIVE PRODUCTS DERIVATIVES EARNINGS ELIGIBLE INSTRUMENTS EMERGING ECONOMIES EMERGING MARKETS EQUITIES EQUITY INSTRUMENTS EQUITY MARKETS FINANCIAL EDUCATION FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL LITERACY FINANCIAL PERFORMANCE FINANCIAL SECTOR FINANCIAL STATEMENTS FIXED INCOME FIXED INCOME PORTFOLIO FRAUD FUND MANAGEMENT FUND MANAGERS FUTURE VALUE GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GOVERNMENT BOND GOVERNMENT BONDS GOVERNMENT GUARANTEES GOVERNMENT SECURITIES HOLDING INCOME INSTRUMENTS INFLATION INFLATION LINKED BONDS INFLATION RATE INFORMATION SYSTEMS INSURANCE INSURANCE COMPANIES INSURANCE PRODUCTS INTEREST RATE INTEREST RATE RISK INTEREST RATES INTERNAL AUDITS INTERNATIONAL BANK INVESTING INVESTMENT ALTERNATIVES INVESTMENT COMPANIES INVESTMENT COMPANY INVESTMENT DECISIONS INVESTMENT GUIDELINES INVESTMENT MANAGEMENT INVESTMENT PERFORMANCE INVESTMENT POLICIES INVESTMENT PROCESS INVESTMENT REGULATION INVESTMENT REGULATIONS INVESTMENT RESTRICTIONS INVESTMENT RETURNS INVESTMENT RISK INVESTMENT RISKS INVESTMENT STRATEGIES INVESTMENT STRATEGY LABOR FORCE LARGE COMPANIES LEGAL FRAMEWORK LEVEL OF CONTRIBUTIONS LIQUID ASSETS LIQUIDITY LIQUIDITY RISK LONG-TERM GOAL LONG-TERM INVESTORS MANDATORY PENSION FUNDS MARGIN REQUIREMENTS MARK-TO-MARKET MARKET DISCIPLINE MARKET FAILURE MARKET FAILURES MARKET OVERSIGHT MARKET PARTICIPANTS MARKET PRACTICES MARKET RISK MARKET SURVEILLANCE MATURITIES MATURITY MINIMUM CAPITAL REQUIREMENT MONETARY POLICY MONIES MUTUAL FUNDS NOMINAL YIELD PENSION PENSION ASSET PENSION ASSETS PENSION AT RETIREMENT PENSION BENEFITS PENSION FUND PENSION FUND ASSETS PENSION FUNDS PENSION INCOME PENSION INCOMES PENSION INVESTMENT PENSION PLAN PENSION PLANS PENSION PROVIDERS PENSION REFORMS PENSION SCHEMES PENSION SECTOR PENSION SYSTEM PENSION SYSTEMS PENSIONERS PENSIONS PERFORMANCE MEASUREMENT PORTFOLIO PORTFOLIO ALLOCATION PORTFOLIO ALLOCATIONS PORTFOLIO CHOICE PORTFOLIO PERFORMANCE PORTFOLIOS PORTFOLIOS OF PENSION FUNDS PRIVATE PENSION PRIVATE PENSION FUND PROBABILITY PROTECTION OF INVESTORS PRUDENTIAL REGULATION PRUDENTIAL STANDARD RATE OF INFLATION RATE OF RETURN RATES OF RETURN RATES OF RETURNS REGULATORY AUTHORITY REGULATORY FRAMEWORK REINVESTMENT REINVESTMENT RISK REPLACEMENT RATE REPLACEMENT RATES RESEARCH ASSISTANCE RESERVE RESERVE REQUIREMENT RESERVE REQUIREMENTS RESERVES RETIREMENT RETIREMENT AGE RETIREMENT INCOME RETURN RETURNS RISK ASSESSMENT RISK BEHAVIOR RISK MANAGEMENT RISK MANAGEMENT SYSTEM RISK MANAGEMENT SYSTEMS RISK PROFILE RISK PROFILES SECURE PENSIONS SECURITIES TRANSACTIONS SENIOR SETTLEMENT SHAREHOLDER SHAREHOLDERS SHORT-TERM INTEREST RATES SOLVENCY STOCK MARKET SUPERVISORY AGENCIES SUPERVISORY AGENCY SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY TERM DEPOSITS TRADING TRANSPARENCY TREASURY TREASURY RATES TRUSTEES TYPES OF INVESTMENTS TYPES OF PENSION USE OF DERIVATIVES VALUABLE VALUATION VALUATIONS VALUE OF CONTRIBUTIONS VALUE OF PENSIONS WAGE YIELD CURVE YIELD CURVES Defined contribution pension systems have faced criticism in the wake of the financial and economic crisis for not delivering adequate and sustainable pension incomes at retirement. Much of the problem has centered around the misalignment of pension fund management companies and the interests of pension fund members, with the focus on short-term volatility rather than delivering adequate pension income over the long term. Although pension fund supervisors in emerging economies have attempted to correct for these market failures, they have not focused sufficiently on the ultimate long-term pension income objective. The paper suggests that in order to have a meaningful impact on future pensions, the supervision of defined contribution pension systems needs to take a more proactive role in minimizing pension risk. This objective would require ensuring that investment risks are aligned with the probability of achieving a target pension at retirement age. The paper also suggests that a proper institutional design of the pension fund industry and intensive use of market surveillance are efficient tools for dealing with most of the operational risks of funded pension fund schemes in emerging economies. 2014-05-15T18:20:20Z 2014-05-15T18:20:20Z 2014-03 http://documents.worldbank.org/curated/en/2014/03/19288694/pension-risk-risk-based-supervision-defined-contribution-pension-funds http://hdl.handle.net/10986/18355 English en_US Policy Research Working Paper;No. 6813 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |