Pension Risk and Risk Based Supervision in Defined Contribution Pension Funds
The main goal of any pension system is to ensure that members receive an adequate pension income when they retire. Whilst traditional defined benefit (DB) pension plans set out what that pension income will be in advance and then strive to deliver...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2014
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| Online Access: | http://hdl.handle.net/10986/17791 |
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okr-10986-17791 |
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oai_dc |
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okr-10986-177912017-12-14T05:20:39Z Pension Risk and Risk Based Supervision in Defined Contribution Pension Funds Randle, Tony Rudolph, Heinz P. ACCESS TO CAPITAL ACCOUNTING ANNUAL RETURNS ASSET ALLOCATION ASSET ALLOCATIONS ASSET CLASS ASSET MANAGEMENT ASSET MANAGERS AVERAGE INTEREST AVERAGE INTEREST RATE BANK DEPOSITS BANK POLICY BANKING INDUSTRY BANKS BASIS POINTS BOND RATES BONDS BOOK ENTRY CAPITAL ADEQUACY CAPITAL MARKET CAPITAL MARKETS 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 DEFINED CONTRIBUTION PENSIONS DEPOSIT DERIVATIVE DERIVATIVE INSTRUMENTS DERIVATIVE PRODUCTS DERIVATIVES EARNINGS ELIGIBLE INSTRUMENTS EMERGING ECONOMIES EMERGING MARKETS EQUITIES EQUITY INSTRUMENTS EQUITY MARKETS FINANCIAL EDUCATION FINANCIAL GROUPS FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL LITERACY FINANCIAL PERFORMANCE FINANCIAL SECTOR FINANCIAL STATEMENTS FIXED INCOME FIXED INCOME PORTFOLIO FRAUD FUND MANAGEMENT FUND MANAGERS FUTURE VALUE 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 INVESTING INVESTMENT ALTERNATIVES INVESTMENT COMPANIES INVESTMENT COMPANY INVESTMENT DECISIONS INVESTMENT MANAGEMENT INVESTMENT PERFORMANCE INVESTMENT PROCESS INVESTMENT REGULATION INVESTMENT REGULATIONS INVESTMENT RESTRICTIONS INVESTMENT RETURNS INVESTMENT RISK INVESTMENT RISKS INVESTMENT STRATEGIES INVESTMENT STRATEGY LABOR FORCE 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 MUTUAL FUNDS NOMINAL YIELD PENSION PENSION ASSET PENSION ASSETS PENSION AT RETIREMENT PENSION BENEFITS PENSION FUND PENSION FUND ASSETS PENSION FUND PERFORMANCE PENSION FUNDS PENSION INCOME PENSION INCOMES PENSION INVESTMENT PENSION PLAN PENSION PLANS PENSION PROVIDERS PENSION SCHEME 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 PRIVATE PENSIONS 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 PENSION SECURE PENSIONS SECURITIES TRANSACTIONS SENIOR SETTLEMENT SHAREHOLDER SHAREHOLDERS SHORT-TERM INTEREST RATES SOLVENCY SUPERVISION OF PENSION FUNDS SUPERVISORY AGENCIES SUPERVISORY AGENCY SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY 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 The main goal of any pension system is to ensure that members receive an adequate pension income when they retire. Whilst traditional defined benefit (DB) pension plans set out what that pension income will be in advance and then strive to deliver it, the growing number of defined contribution (DC) plans accumulates a sum of assets which can then be turned into a pension income on retirement. However, the amount of this retirement income is not set in advance. In the absence of a proper regulatory framework, feature n DC plans leads to a focus by not only 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. The paper is organized as follows: chapter two discusses the origins of risks based supervision and discusses the role of capital in the alignment of incentives in financial institutions. Chapter three discusses the concept of risk based supervision for pension funds, and its limitations in the case of DC pension schemes. Chapter four discusses the effectiveness of RBS schemes in DC systems in emerging economies, and the last section provides some lessons learned. 2014-04-15T18:37:07Z 2014-04-15T18:37:07Z 2014-03-18 http://hdl.handle.net/10986/17791 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
World Bank |
| building |
World Bank Open Knowledge Repository |
| collection |
Online Access |
| language |
English en_US |
| topic |
ACCESS TO CAPITAL ACCOUNTING ANNUAL RETURNS ASSET ALLOCATION ASSET ALLOCATIONS ASSET CLASS ASSET MANAGEMENT ASSET MANAGERS AVERAGE INTEREST AVERAGE INTEREST RATE BANK DEPOSITS BANK POLICY BANKING INDUSTRY BANKS BASIS POINTS BOND RATES BONDS BOOK ENTRY CAPITAL ADEQUACY CAPITAL MARKET CAPITAL MARKETS 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 DEFINED CONTRIBUTION PENSIONS DEPOSIT DERIVATIVE DERIVATIVE INSTRUMENTS DERIVATIVE PRODUCTS DERIVATIVES EARNINGS ELIGIBLE INSTRUMENTS EMERGING ECONOMIES EMERGING MARKETS EQUITIES EQUITY INSTRUMENTS EQUITY MARKETS FINANCIAL EDUCATION FINANCIAL GROUPS FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL LITERACY FINANCIAL PERFORMANCE FINANCIAL SECTOR FINANCIAL STATEMENTS FIXED INCOME FIXED INCOME PORTFOLIO FRAUD FUND MANAGEMENT FUND MANAGERS FUTURE VALUE 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 INVESTING INVESTMENT ALTERNATIVES INVESTMENT COMPANIES INVESTMENT COMPANY INVESTMENT DECISIONS INVESTMENT MANAGEMENT INVESTMENT PERFORMANCE INVESTMENT PROCESS INVESTMENT REGULATION INVESTMENT REGULATIONS INVESTMENT RESTRICTIONS INVESTMENT RETURNS INVESTMENT RISK INVESTMENT RISKS INVESTMENT STRATEGIES INVESTMENT STRATEGY LABOR FORCE 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 MUTUAL FUNDS NOMINAL YIELD PENSION PENSION ASSET PENSION ASSETS PENSION AT RETIREMENT PENSION BENEFITS PENSION FUND PENSION FUND ASSETS PENSION FUND PERFORMANCE PENSION FUNDS PENSION INCOME PENSION INCOMES PENSION INVESTMENT PENSION PLAN PENSION PLANS PENSION PROVIDERS PENSION SCHEME 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 PRIVATE PENSIONS 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 PENSION SECURE PENSIONS SECURITIES TRANSACTIONS SENIOR SETTLEMENT SHAREHOLDER SHAREHOLDERS SHORT-TERM INTEREST RATES SOLVENCY SUPERVISION OF PENSION FUNDS SUPERVISORY AGENCIES SUPERVISORY AGENCY SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY 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 ASSET ALLOCATION ASSET ALLOCATIONS ASSET CLASS ASSET MANAGEMENT ASSET MANAGERS AVERAGE INTEREST AVERAGE INTEREST RATE BANK DEPOSITS BANK POLICY BANKING INDUSTRY BANKS BASIS POINTS BOND RATES BONDS BOOK ENTRY CAPITAL ADEQUACY CAPITAL MARKET CAPITAL MARKETS 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 DEFINED CONTRIBUTION PENSIONS DEPOSIT DERIVATIVE DERIVATIVE INSTRUMENTS DERIVATIVE PRODUCTS DERIVATIVES EARNINGS ELIGIBLE INSTRUMENTS EMERGING ECONOMIES EMERGING MARKETS EQUITIES EQUITY INSTRUMENTS EQUITY MARKETS FINANCIAL EDUCATION FINANCIAL GROUPS FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL LITERACY FINANCIAL PERFORMANCE FINANCIAL SECTOR FINANCIAL STATEMENTS FIXED INCOME FIXED INCOME PORTFOLIO FRAUD FUND MANAGEMENT FUND MANAGERS FUTURE VALUE 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 INVESTING INVESTMENT ALTERNATIVES INVESTMENT COMPANIES INVESTMENT COMPANY INVESTMENT DECISIONS INVESTMENT MANAGEMENT INVESTMENT PERFORMANCE INVESTMENT PROCESS INVESTMENT REGULATION INVESTMENT REGULATIONS INVESTMENT RESTRICTIONS INVESTMENT RETURNS INVESTMENT RISK INVESTMENT RISKS INVESTMENT STRATEGIES INVESTMENT STRATEGY LABOR FORCE 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 MUTUAL FUNDS NOMINAL YIELD PENSION PENSION ASSET PENSION ASSETS PENSION AT RETIREMENT PENSION BENEFITS PENSION FUND PENSION FUND ASSETS PENSION FUND PERFORMANCE PENSION FUNDS PENSION INCOME PENSION INCOMES PENSION INVESTMENT PENSION PLAN PENSION PLANS PENSION PROVIDERS PENSION SCHEME 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 PRIVATE PENSIONS 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 PENSION SECURE PENSIONS SECURITIES TRANSACTIONS SENIOR SETTLEMENT SHAREHOLDER SHAREHOLDERS SHORT-TERM INTEREST RATES SOLVENCY SUPERVISION OF PENSION FUNDS SUPERVISORY AGENCIES SUPERVISORY AGENCY SUPERVISORY AUTHORITIES SUPERVISORY AUTHORITY 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 |
| description |
The main goal of any pension system is
to ensure that members receive an adequate pension income
when they retire. Whilst traditional defined benefit (DB)
pension plans set out what that pension income will be in
advance and then strive to deliver it, the growing number of
defined contribution (DC) plans accumulates a sum of assets
which can then be turned into a pension income on
retirement. However, the amount of this retirement income is
not set in advance. In the absence of a proper regulatory
framework, feature n DC plans leads to a focus by not only
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. The paper is organized as
follows: chapter two discusses the origins of risks based
supervision and discusses the role of capital in the
alignment of incentives in financial institutions. Chapter
three discusses the concept of risk based supervision for
pension funds, and its limitations in the case of DC pension
schemes. Chapter four discusses the effectiveness of RBS
schemes in DC systems in emerging economies, and the last
section provides some lessons learned. |
| format |
Publications & 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://hdl.handle.net/10986/17791 |
| _version_ |
1610777989766709248 |