Pension fund: Wikis

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Encyclopedia

From Wikipedia, the free encyclopedia

A pension fund is a pool of assets forming an independent legal entity that are bought with the contributions to a pension plan for the exclusive purpose of financing pension plan benefits.[citation needed]

Pension funds are important shareholders of listed and private companies. They are especially important to the stock market where large institutional investors like the Ontario Teachers' Pension Plan dominate. The largest 300 pension funds collectively hold about $6 trillion in assets.[1] In January 2008, The Economist reported that Morgan Stanley estimates that pension funds worldwide hold over US$20 trillion in assets, the largest for any category of investor ahead of mutual funds, insurance companies, currency reserves, sovereign wealth funds, hedge funds, or private equity.[2]

Contents

Classifications

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Open vs. closed pension funds

Open pension funds support at least one pension plan with no restriction on membership while closed pension funds support only pension plans that are limited to certain employees.[3]

Closed pension funds are further subclassified into:

  • Single employer pension funds
  • Multi-employer pension funds
  • Related member pension funds
  • Individual pension funds

Public vs. private pension funds

A public pension fund is one that is regulated under public sector law while a private pension fund is regulated under private sector law. In certain countries the distinction between public or government pension funds and private pension funds may be difficult to assess.

Examples

Australia

See main article, Superannuation in Australia

Government

Private

  • The Retail Employees Superannuation Trust (Australia's largest superannuation fund by membership)[4]
  • ANZ Australian Staff Superannuation Scheme (for employees of ANZ Bank)

Canada

Government

Private

Chile

China

  • National Council for Social Security Fund [1] (全国社会保障基金理事会)

Hong Kong

Netherlands

Norway

Singapore

United States

Government

Saudi Arabia

  • the general organization for social insurance

Greece

Government

  • Public Employees Pension Fund [2]

Private

  • TAPILTAT

Largest pension funds

Country Fund Assets US$ (in billions) Inception Origin Approx wealth per citizen
 Japan Government Pension Investment Fund $1370[5] 2006 Non-commodity &Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$".Expression error: Unrecognised punctuation character "$"$10,800
 Norway Government Pension Fund of Norway $450[6] 1990 Oil &Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$".Expression error: Unrecognised punctuation character "$"$95,700
 Netherlands Stichting Pensioenfonds ABP (ABP) $313 (€215) 1922 Non-commodity N/A
 Canada (Quebec) Caisse de dépôt et placement du Québec (the Quebec Pension Fund $258 1965 Non-commodity N/A
 South Korea Korea National Pension Service $240[7] 1988 Non-commodity &Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$".Expression error: Unrecognised punctuation character "$"$5,000
 United States (California) California Public Employees' Retirement System (CalPERS) $202[8] 1932 Non-commodity &Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$"Expression error: Unrecognised punctuation character "$".Expression error: Unrecognised punctuation character "$"$126,250
 Netherlands Stichting Pensioenfonds Zorg en Welzijn (PFZW, formerly PGGM) $123 (€85) 1969 Non-commodity N/A
 Canada CPP Investment Board (Canada Pension Plan) $122.7 1997 Non-commodity $183.300
 Canada (Ontario) Ontario Teachers' Pension Plan $109 1990 Non-commodity N/A
 Ireland National Pension Reserve Fund (NPRF) $30[9] 2001 Non-commodity N/A
 Brazil Caixa de Previdencia dos Funcionários do Banco do Brasil (PREVI) $30[10] 1904 Finance ?

Regulatory concerns

Impact of the Development of Pension Funds

Pension Funds have played a major role in the emergence of truly global money flows, notably through their large-scale cross-border investments, channelling the excess long-term liquidities of G8 and OPEC countries towards both Western bourses and emerging markets, contributing to the development of a truly integrated and thus more efficient global financial sphere. [11]

But the impact of the development of pension funds on the global economy is sometimes viewed in some quarters as a contentious issue as national, domestic markets are further integrated and thus interconnected, which facilitates both cross-border investment in times of economic growth and abrupt capital flight in times of crisis.

The relative size of pension funds could contribute to explaining the overall economic strength of developed countries such as e.g. Canada: Canadian pension funds (7 of which have more than C$100. billion under management) are powerful investors in both domestic and global financial markets with hundreds of billions of dollars in assets in an economy of only around one trillion dollars- some think-tanks such as the CEE Council have argued that this constitutes a long-term competitive advantage for the Canadian economy.

See also

References


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