Proving Incentives for Long-Term Investment by Pension Funds : The Use of Outcome-based Benchmarks
A fundamental goal of any pension system is to ensure that members receive an adequate income when they retire. Although traditional defined benefit pension plans set out how pension income will be determined in advance and then strive to deliver t...
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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/2014/05/19548017/proving-incentives-long-term-investment-pension-funds-use-outcome-based-benchmarks-proving-incentives-long-term-investment-pension-funds-use-outcome-based-benchmarks http://hdl.handle.net/10986/18800 |
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okr-10986-18800 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING AMOUNT OF RISK ANNUITY ARBITRAGE ASSET CLASS ASSET CLASSES ASSET MANAGEMENT ASSET MANAGERS ASSET VALUE BALANCE OF PAYMENT BANK POLICY CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CONFLICT OF INTEREST CONTRACTUAL SAVINGS CONTRIBUTION RATE CORPORATE BONDS CREDIBILITY DEBT DEBT FINANCING DEFERRED ANNUITY DEFINED BENEFIT DEFINED BENEFIT PENSION PLANS DEFINED CONTRIBUTION PENSIONS DEFINED CONTRIBUTION PLANS DEMOGRAPHIC DEPENDENCY RATIO DEPENDENCY RATIOS DEVELOPING ECONOMIES DIVERSIFIED PORTFOLIOS DOMESTIC GOVERNMENT BONDS DOMESTIC MARKETS ECONOMIC CRISIS EQUITIES EQUITY FUND EQUITY INVESTMENTS EQUITY RETURNS ETHICAL FUND EXPOSURE EXPOSURES EXTERNAL ASSET FINANCIAL CRISIS FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENT FINANCIAL INSTRUMENTS FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL SECTOR FINANCIAL SYSTEM FISCAL DEFICITS FIXED ANNUITIES FIXED INCOME FOREIGN EXCHANGE FOREIGN EXCHANGE RISK FUND MANAGEMENT FUND MANAGERS FUND PERFORMANCE FUNDED PENSION FUNDED PENSION SYSTEMS FUNDED SYSTEMS FUTURE PENSION FUTURE PENSIONS GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GLOBAL EQUITIES GLOBAL EQUITY GOVERNMENT POLICY INCOMES INDEXED BONDS INDIVIDUAL ACCOUNT INDIVIDUAL ACCOUNTS INFLATION INSTITUTIONAL INVESTORS INSURANCE INTERNATIONAL BANK INTERNATIONAL DIVERSIFICATION INTERNATIONAL FINANCIAL MARKETS INVESTING INVESTMENT APPROACH INVESTMENT APPROACHES INVESTMENT CHOICES INVESTMENT DECISIONS INVESTMENT GUIDELINES INVESTMENT HORIZON INVESTMENT OPPORTUNITIES INVESTMENT PERFORMANCE INVESTMENT REGULATION INVESTMENT REGULATIONS INVESTMENT RESTRICTIONS INVESTMENT RETURN INVESTMENT RETURNS INVESTMENT RISK INVESTMENT STRATEGIES INVESTMENT STRATEGY INVESTOR PROTECTION JURISDICTION JURISDICTIONS LABOR MARKET LABOUR INCOME LEGAL FRAMEWORK LIABILITY LIQUID ASSETS LIQUIDITY LOCAL CAPITAL MARKETS LOCAL MARKET LONG-TERM INVESTMENT LONG-TERM INVESTORS MANDATORY SYSTEMS MARKET INDEXES MORTALITY NATIONAL PENSION NATIONAL PENSIONS NATIONAL SAVINGS NET RETURNS OPTIMAL INVESTMENT OPTIMAL PORTFOLIO OPTIMAL PORTFOLIOS OUTPUT PENSION PENSION ASSETS PENSION AT RETIREMENT PENSION AWARENESS PENSION BENEFITS PENSION FUND PENSION FUND ASSET PENSION FUND ASSETS PENSION FUND MANAGEMENT PENSION FUND MANAGERS PENSION FUND MEMBERS PENSION FUNDS PENSION INCOME PENSION INCOMES PENSION INVESTMENT PENSION LIABILITIES PENSION PAYMENTS PENSION PLAN PENSION PROVIDERS PENSION REFORM PENSION REFORMS PENSION REGULATION PENSION REGULATORS PENSION RESERVES PENSION SAVINGS PENSION SCHEME PENSION STATEMENTS PENSION SYSTEM PENSION SYSTEMS PENSIONERS PENSIONS PILLAR SYSTEMS PORTFOLIO PORTFOLIOS PRIVATE PENSION PRIVATE PENSION FUNDS PRIVATE PENSIONS PRIVATE PILLARS PRIVATE SECTOR DEVELOPMENT PUBLIC PENSION PUBLIC PENSIONS PUBLIC SYSTEM RATE OF RETURN RATES OF RETURN REGULATOR REGULATORS REGULATORY AUTHORITY REGULATORY BODY REGULATORY FRAMEWORK REGULATORY FRAMEWORKS REPLACEMENT RATE REPLACEMENT RATE TARGET REPLACEMENT RATES RESERVE RESERVE FUNDS RESERVE REQUIREMENT RESERVES RETIREMENT RETIREMENT AGE RETIREMENT DATE RETIREMENT FUND RETIREMENT INCOME RETIREMENT INCOME SYSTEM RETIREMENT POLICIES RETIREMENT SAVINGS RETURN RETURN ON ASSETS RETURNS RISK AVERSION RISK CONTROLS RISK MANAGEMENT RISK MANAGEMENT SYSTEM RISK PROFILE RISK PROFILES RISK-FREE RATE RISKY ASSETS SECURITIES SHORT-TERM VOLATILITY SOCIAL INSURANCE SOCIAL INSURANCE PROGRAM SOLVENCY SOVEREIGN BONDS STOCKS SUPERVISORY AGENCY SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY SYSTEMIC RISKS TAX TRANSACTION TRANSITION COUNTRIES TREASURY TREASURY BILLS TRUSTEE TRUSTEES UNDERDEVELOPED CAPITAL MARKETS VARIABLE ANNUITIES WITHDRAWAL |
| spellingShingle |
ACCOUNTING AMOUNT OF RISK ANNUITY ARBITRAGE ASSET CLASS ASSET CLASSES ASSET MANAGEMENT ASSET MANAGERS ASSET VALUE BALANCE OF PAYMENT BANK POLICY CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CONFLICT OF INTEREST CONTRACTUAL SAVINGS CONTRIBUTION RATE CORPORATE BONDS CREDIBILITY DEBT DEBT FINANCING DEFERRED ANNUITY DEFINED BENEFIT DEFINED BENEFIT PENSION PLANS DEFINED CONTRIBUTION PENSIONS DEFINED CONTRIBUTION PLANS DEMOGRAPHIC DEPENDENCY RATIO DEPENDENCY RATIOS DEVELOPING ECONOMIES DIVERSIFIED PORTFOLIOS DOMESTIC GOVERNMENT BONDS DOMESTIC MARKETS ECONOMIC CRISIS EQUITIES EQUITY FUND EQUITY INVESTMENTS EQUITY RETURNS ETHICAL FUND EXPOSURE EXPOSURES EXTERNAL ASSET FINANCIAL CRISIS FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENT FINANCIAL INSTRUMENTS FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL SECTOR FINANCIAL SYSTEM FISCAL DEFICITS FIXED ANNUITIES FIXED INCOME FOREIGN EXCHANGE FOREIGN EXCHANGE RISK FUND MANAGEMENT FUND MANAGERS FUND PERFORMANCE FUNDED PENSION FUNDED PENSION SYSTEMS FUNDED SYSTEMS FUTURE PENSION FUTURE PENSIONS GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GLOBAL EQUITIES GLOBAL EQUITY GOVERNMENT POLICY INCOMES INDEXED BONDS INDIVIDUAL ACCOUNT INDIVIDUAL ACCOUNTS INFLATION INSTITUTIONAL INVESTORS INSURANCE INTERNATIONAL BANK INTERNATIONAL DIVERSIFICATION INTERNATIONAL FINANCIAL MARKETS INVESTING INVESTMENT APPROACH INVESTMENT APPROACHES INVESTMENT CHOICES INVESTMENT DECISIONS INVESTMENT GUIDELINES INVESTMENT HORIZON INVESTMENT OPPORTUNITIES INVESTMENT PERFORMANCE INVESTMENT REGULATION INVESTMENT REGULATIONS INVESTMENT RESTRICTIONS INVESTMENT RETURN INVESTMENT RETURNS INVESTMENT RISK INVESTMENT STRATEGIES INVESTMENT STRATEGY INVESTOR PROTECTION JURISDICTION JURISDICTIONS LABOR MARKET LABOUR INCOME LEGAL FRAMEWORK LIABILITY LIQUID ASSETS LIQUIDITY LOCAL CAPITAL MARKETS LOCAL MARKET LONG-TERM INVESTMENT LONG-TERM INVESTORS MANDATORY SYSTEMS MARKET INDEXES MORTALITY NATIONAL PENSION NATIONAL PENSIONS NATIONAL SAVINGS NET RETURNS OPTIMAL INVESTMENT OPTIMAL PORTFOLIO OPTIMAL PORTFOLIOS OUTPUT PENSION PENSION ASSETS PENSION AT RETIREMENT PENSION AWARENESS PENSION BENEFITS PENSION FUND PENSION FUND ASSET PENSION FUND ASSETS PENSION FUND MANAGEMENT PENSION FUND MANAGERS PENSION FUND MEMBERS PENSION FUNDS PENSION INCOME PENSION INCOMES PENSION INVESTMENT PENSION LIABILITIES PENSION PAYMENTS PENSION PLAN PENSION PROVIDERS PENSION REFORM PENSION REFORMS PENSION REGULATION PENSION REGULATORS PENSION RESERVES PENSION SAVINGS PENSION SCHEME PENSION STATEMENTS PENSION SYSTEM PENSION SYSTEMS PENSIONERS PENSIONS PILLAR SYSTEMS PORTFOLIO PORTFOLIOS PRIVATE PENSION PRIVATE PENSION FUNDS PRIVATE PENSIONS PRIVATE PILLARS PRIVATE SECTOR DEVELOPMENT PUBLIC PENSION PUBLIC PENSIONS PUBLIC SYSTEM RATE OF RETURN RATES OF RETURN REGULATOR REGULATORS REGULATORY AUTHORITY REGULATORY BODY REGULATORY FRAMEWORK REGULATORY FRAMEWORKS REPLACEMENT RATE REPLACEMENT RATE TARGET REPLACEMENT RATES RESERVE RESERVE FUNDS RESERVE REQUIREMENT RESERVES RETIREMENT RETIREMENT AGE RETIREMENT DATE RETIREMENT FUND RETIREMENT INCOME RETIREMENT INCOME SYSTEM RETIREMENT POLICIES RETIREMENT SAVINGS RETURN RETURN ON ASSETS RETURNS RISK AVERSION RISK CONTROLS RISK MANAGEMENT RISK MANAGEMENT SYSTEM RISK PROFILE RISK PROFILES RISK-FREE RATE RISKY ASSETS SECURITIES SHORT-TERM VOLATILITY SOCIAL INSURANCE SOCIAL INSURANCE PROGRAM SOLVENCY SOVEREIGN BONDS STOCKS SUPERVISORY AGENCY SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY SYSTEMIC RISKS TAX TRANSACTION TRANSITION COUNTRIES TREASURY TREASURY BILLS TRUSTEE TRUSTEES UNDERDEVELOPED CAPITAL MARKETS VARIABLE ANNUITIES WITHDRAWAL Stewart, Fiona Proving Incentives for Long-Term Investment by Pension Funds : The Use of Outcome-based Benchmarks |
| relation |
Policy Research Working Paper;No. 6885 |
| description |
A fundamental goal of any pension system
is to ensure that members receive an adequate income when
they retire. Although traditional defined benefit pension
plans set out how pension income will be determined in
advance and then strive to deliver this, the growing number
of defined contribution plans accumulate a sum of assets
which can then be turned into a pension income on
retirement. However, the amount of this retirement income is
not predefined This frequently leads to a focus by not only
most pension providers, but also regulators and pension plan
members themselves on the short-term accumulation of pension
assets rather than the longer-term goal of securing an
adequate retirement income. This paper discusses a possible
solution to this challenge: the use of benchmarks to
encourage pension funds to invest with the longer-term goal
of delivering adequate retirement income in mind. Examples
are provided of leading pension funds that already work with
long-term, outcome-based benchmarks. The paper suggests a
methodology for pension regulators to use in order to
incentivize pension funds in their jurisdictions to adopt a
similar approach. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Stewart, Fiona |
| author_facet |
Stewart, Fiona |
| author_sort |
Stewart, Fiona |
| title |
Proving Incentives for Long-Term Investment by Pension Funds : The Use of Outcome-based Benchmarks |
| title_short |
Proving Incentives for Long-Term Investment by Pension Funds : The Use of Outcome-based Benchmarks |
| title_full |
Proving Incentives for Long-Term Investment by Pension Funds : The Use of Outcome-based Benchmarks |
| title_fullStr |
Proving Incentives for Long-Term Investment by Pension Funds : The Use of Outcome-based Benchmarks |
| title_full_unstemmed |
Proving Incentives for Long-Term Investment by Pension Funds : The Use of Outcome-based Benchmarks |
| title_sort |
proving incentives for long-term investment by pension funds : the use of outcome-based benchmarks |
| publisher |
World Bank, Washington, DC |
| publishDate |
2014 |
| url |
http://documents.worldbank.org/curated/en/2014/05/19548017/proving-incentives-long-term-investment-pension-funds-use-outcome-based-benchmarks-proving-incentives-long-term-investment-pension-funds-use-outcome-based-benchmarks http://hdl.handle.net/10986/18800 |
| _version_ |
1764442722647670784 |
| spelling |
okr-10986-188002021-04-23T14:03:49Z Proving Incentives for Long-Term Investment by Pension Funds : The Use of Outcome-based Benchmarks Stewart, Fiona ACCOUNTING AMOUNT OF RISK ANNUITY ARBITRAGE ASSET CLASS ASSET CLASSES ASSET MANAGEMENT ASSET MANAGERS ASSET VALUE BALANCE OF PAYMENT BANK POLICY CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CONFLICT OF INTEREST CONTRACTUAL SAVINGS CONTRIBUTION RATE CORPORATE BONDS CREDIBILITY DEBT DEBT FINANCING DEFERRED ANNUITY DEFINED BENEFIT DEFINED BENEFIT PENSION PLANS DEFINED CONTRIBUTION PENSIONS DEFINED CONTRIBUTION PLANS DEMOGRAPHIC DEPENDENCY RATIO DEPENDENCY RATIOS DEVELOPING ECONOMIES DIVERSIFIED PORTFOLIOS DOMESTIC GOVERNMENT BONDS DOMESTIC MARKETS ECONOMIC CRISIS EQUITIES EQUITY FUND EQUITY INVESTMENTS EQUITY RETURNS ETHICAL FUND EXPOSURE EXPOSURES EXTERNAL ASSET FINANCIAL CRISIS FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENT FINANCIAL INSTRUMENTS FINANCIAL MARKETS FINANCIAL PERFORMANCE FINANCIAL SECTOR FINANCIAL SYSTEM FISCAL DEFICITS FIXED ANNUITIES FIXED INCOME FOREIGN EXCHANGE FOREIGN EXCHANGE RISK FUND MANAGEMENT FUND MANAGERS FUND PERFORMANCE FUNDED PENSION FUNDED PENSION SYSTEMS FUNDED SYSTEMS FUTURE PENSION FUTURE PENSIONS GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GLOBAL EQUITIES GLOBAL EQUITY GOVERNMENT POLICY INCOMES INDEXED BONDS INDIVIDUAL ACCOUNT INDIVIDUAL ACCOUNTS INFLATION INSTITUTIONAL INVESTORS INSURANCE INTERNATIONAL BANK INTERNATIONAL DIVERSIFICATION INTERNATIONAL FINANCIAL MARKETS INVESTING INVESTMENT APPROACH INVESTMENT APPROACHES INVESTMENT CHOICES INVESTMENT DECISIONS INVESTMENT GUIDELINES INVESTMENT HORIZON INVESTMENT OPPORTUNITIES INVESTMENT PERFORMANCE INVESTMENT REGULATION INVESTMENT REGULATIONS INVESTMENT RESTRICTIONS INVESTMENT RETURN INVESTMENT RETURNS INVESTMENT RISK INVESTMENT STRATEGIES INVESTMENT STRATEGY INVESTOR PROTECTION JURISDICTION JURISDICTIONS LABOR MARKET LABOUR INCOME LEGAL FRAMEWORK LIABILITY LIQUID ASSETS LIQUIDITY LOCAL CAPITAL MARKETS LOCAL MARKET LONG-TERM INVESTMENT LONG-TERM INVESTORS MANDATORY SYSTEMS MARKET INDEXES MORTALITY NATIONAL PENSION NATIONAL PENSIONS NATIONAL SAVINGS NET RETURNS OPTIMAL INVESTMENT OPTIMAL PORTFOLIO OPTIMAL PORTFOLIOS OUTPUT PENSION PENSION ASSETS PENSION AT RETIREMENT PENSION AWARENESS PENSION BENEFITS PENSION FUND PENSION FUND ASSET PENSION FUND ASSETS PENSION FUND MANAGEMENT PENSION FUND MANAGERS PENSION FUND MEMBERS PENSION FUNDS PENSION INCOME PENSION INCOMES PENSION INVESTMENT PENSION LIABILITIES PENSION PAYMENTS PENSION PLAN PENSION PROVIDERS PENSION REFORM PENSION REFORMS PENSION REGULATION PENSION REGULATORS PENSION RESERVES PENSION SAVINGS PENSION SCHEME PENSION STATEMENTS PENSION SYSTEM PENSION SYSTEMS PENSIONERS PENSIONS PILLAR SYSTEMS PORTFOLIO PORTFOLIOS PRIVATE PENSION PRIVATE PENSION FUNDS PRIVATE PENSIONS PRIVATE PILLARS PRIVATE SECTOR DEVELOPMENT PUBLIC PENSION PUBLIC PENSIONS PUBLIC SYSTEM RATE OF RETURN RATES OF RETURN REGULATOR REGULATORS REGULATORY AUTHORITY REGULATORY BODY REGULATORY FRAMEWORK REGULATORY FRAMEWORKS REPLACEMENT RATE REPLACEMENT RATE TARGET REPLACEMENT RATES RESERVE RESERVE FUNDS RESERVE REQUIREMENT RESERVES RETIREMENT RETIREMENT AGE RETIREMENT DATE RETIREMENT FUND RETIREMENT INCOME RETIREMENT INCOME SYSTEM RETIREMENT POLICIES RETIREMENT SAVINGS RETURN RETURN ON ASSETS RETURNS RISK AVERSION RISK CONTROLS RISK MANAGEMENT RISK MANAGEMENT SYSTEM RISK PROFILE RISK PROFILES RISK-FREE RATE RISKY ASSETS SECURITIES SHORT-TERM VOLATILITY SOCIAL INSURANCE SOCIAL INSURANCE PROGRAM SOLVENCY SOVEREIGN BONDS STOCKS SUPERVISORY AGENCY SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY SYSTEMIC RISKS TAX TRANSACTION TRANSITION COUNTRIES TREASURY TREASURY BILLS TRUSTEE TRUSTEES UNDERDEVELOPED CAPITAL MARKETS VARIABLE ANNUITIES WITHDRAWAL A fundamental goal of any pension system is to ensure that members receive an adequate income when they retire. Although traditional defined benefit pension plans set out how pension income will be determined in advance and then strive to deliver this, the growing number of defined contribution plans accumulate a sum of assets which can then be turned into a pension income on retirement. However, the amount of this retirement income is not predefined This frequently leads to a focus by not only most pension providers, but also regulators and pension plan members themselves on the short-term accumulation of pension assets rather than the longer-term goal of securing an adequate retirement income. This paper discusses a possible solution to this challenge: the use of benchmarks to encourage pension funds to invest with the longer-term goal of delivering adequate retirement income in mind. Examples are provided of leading pension funds that already work with long-term, outcome-based benchmarks. The paper suggests a methodology for pension regulators to use in order to incentivize pension funds in their jurisdictions to adopt a similar approach. 2014-06-26T21:37:45Z 2014-06-26T21:37:45Z 2014-05 http://documents.worldbank.org/curated/en/2014/05/19548017/proving-incentives-long-term-investment-pension-funds-use-outcome-based-benchmarks-proving-incentives-long-term-investment-pension-funds-use-outcome-based-benchmarks http://hdl.handle.net/10986/18800 English en_US Policy Research Working Paper;No. 6885 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 |