By Thomas Power Pension funds must be operated solely for the benefit of participants. Regulator must be strong and politically independent; Laws must focus on safety and soundness; There is no one size fits model including the EBRD Three-Pillar model. Full Content: EconBiz
By Gregorio Impavido Stress testing is a useful and increasingly popular, yet sometimes misunderstood, method of analyzing the resilience of financial systems to adverse events. This paper aims to help demystify stress tests and illustrate their strengths and weaknesses. Using an Excel-based template with institution-specific data, readers are walked through the basics of liability valuation and stress testing of assets and liabilities of a typical defined benefit plan. Full Content: EconBiz
By Richard P. Hinz & Anca Mataoanu (more…)
By S. P. Subedar Power Point Presentation. Occupational pension funds need to be regulated and supervised. A statutory role in the form of Scheme Actuary needs to be created for DB pensions.Adequate information need to be provided annually to the DC pension subscribers about the likely accumulation and pension pay out on their retirement. These measures would ensure that all pension issues are addressed in a holistic manner and cohesiveness is brought in regulation and supervision of pension business. (more…)
By Henriëtte Prast & Iman Van Lelyveld In recent years, several European Union member states have modified the institutional design offinancial supervision. These reforms pose the question which considerations have led to the different models chosen in these countries. We analyse the considerations in the Netherlands leading to the choice in 2002 of the twin -peaks model of financial supervision. The new model is based on the objectives of supervision. Thus, a separate authority is responsible for conduct-ofbusiness supervision, whereas...
By Félix Villatoro, Solange Berstein & Olga Fuentes In a defined contribution pension system, one of the main risks faced by members refers to the investment of funds. In this context, we discuss which is the most suitable risk measurement for the affiliates to the pension system. Different life-cycle investment strategies are evaluated under this measure for different types of workers. We point out the importance of designing well-suited default investment options in light of the economic behavior of members,...
By Fiona Stewart, John Ashcroft & Nina Paklina The governance, oversight and performance measurement of financial supervisory authorities are increasingly recognized as important topics – not least due to the recent financial crisis and perceived problems in (and lack of) the regulatory oversight of financial institutions. Yet this is a relatively under-researched area, particularly in relation to pension supervision. This paper therefore attempts to combine theoretical material from a range of financial sectors along with practical examples from the pensions...
By Fiona Stewart & John Ashcroft Defined contribution (DC) plans are playing a larger role in pension systems around the world. Pension supervisory authorities are consequently asking if their oversight approaches need to adapt to this development – given that the risks within DC systems are born by the plan members themselves? This paper highlights the key challenges for DC supervisors, outlining the different mechanisms which can be used to control risks within DC systems, and how the use of these...
By Roberto Calderón-Colín, Enrique E. Dominguez & Moises J. Schwartz This paper was prepared for the World Bank 4th Annual Contractual Savings Conference (Washington DC, April 2008) co-organized by Gregorio Impavido. The article shows that account transfers among pension administrators in Mexico barely respond to price or return considerations and in general has not improved the consumer's pension balance. Instead of strengthening competition through lower fees and higher returns for the consumer, AFORE switching has so far undermined the system...
By Tony Randle & Heinz P. Rudolph 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...
