Pension fund

A pension fund, also known as a superannuation fund in some countries, is any plan, fund, or scheme which provides retirement income.

Pension funds in 2005

Pension funds typically have large amounts of money to invest and are the major investors in listed and private companies. They are especially important to the stock market where large institutional investors 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]

The (Japanese) Government Pension Investment Fund (GPIF) is the world's largest public pension fund which oversees 139 trillion Yen ($1.24 trillion USD) in assets.[3]

Classifications

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.[4]

Closed pension funds are further subclassified into:

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. In others, the distinction is made sharply in law, with very specific requirements for administration and investment. For example, local governmental bodies in the United States are subject to laws passed by the states in which those localities exist, and these laws include provisions such as defining classes of permitted investments and a minimum municipal obligation.[5]

Largest pension funds

Country Fund Assets US$ (in billions) Inception Origin
 United States Federal Old-age and Survivors Insurance Trust Fund $2645[6] 1935 Non-commodity
 Japan Government Pension Investment Fund $1370[7] 2006 Non-commodity
 Norway Government Pension Fund of Norway $856[8] 1990 Oil
 United States Civil Service Retirement and Disability Fund $850[9] 1920 Non-commodity
 United States Military Retirement Fund $474[10] Non-commodity
 South Korea National Pension Service (NPS) $422[11] 1988 Non-commodity
 Netherlands Stichting Pensioenfonds ABP (ABP) $388[12] (€344) 1922 Non-commodity
 United States Thrift Savings Plan (TSP) $407[13] 1986 Non-commodity
 United States (California) California Public Employees' Retirement System (CalPERS) $289.8[14] 1932 Non-commodity
 Netherlands Stichting Pensioenfonds Zorg en Welzijn (PFZW, formerly PGGM) $183[15] (€162) 1969 Non-commodity
 United States (California) California State Teachers' Retirement System (CalSTRS) $189.1[16] 1913 Non-commodity
 Canada Canada Pension Plan and CPP Investment Board $209 (CAD$234)[17] 1965 Non-commodity
 China National Social Security Fund $177.4[18] 2000 Non-commodity
 Canada (Quebec) Caisse de dépôt et placement du Québec (The Caisse, or CDPQ) $176[19] 1965 Non-commodity
 Malaysia Employees Provident Fund $130[20] 1991 Non-commodity
 Canada (Ontario) Ontario Teachers' Pension Plan $130 1990 Non-commodity
 South Africa Government Employees Pension Fund (GEPF) $112 (ZAR1426b) 1996 Non-commodity
 India Employees' Provident Fund Organisation (EPFO) $104 1952 Non-commodity
 Brazil Caixa de Previdencia dos Funcionários do Banco do Brasil (PREVI) $80 1904 Finance
 Ireland National Pension Reserve Fund (NPRF) $30[21] 2001 Non-commodity
 France Pensions Reserve Fund (France) (NPRF) $56[22] 2001 Non-commodity
 United States Federal Disability Insurance Trust Fund $43[6] 1935 Non-commodity

By country

Australia

Government

Industry (not-for-profit)[23]

Private

Brazil

Canada

Government

Private

Chile

China

Greece

Government

Private

Hong Kong

India

Japan

Malaysia

Morocco

Nepal

Netherlands

Norway

Romania

The pension system in Romania is made of 3 pillars, one is the state pension (Pillar I - Mandatory), second is a private mandatory pension were the state transfers a percentage of the contribution it collects for the public pension and third an optional private pension (Pillar III - Voluntary).

The Financial Supervisory Authority - Private Pension is responsible for the supervision and regulation of the private pension system.[24]

Saudi Arabia

Singapore

Switzerland

Turkey

Government

Social Security Institution was established by the Social Security Institution Law No:5502 which was published in the Official Gazette No: 26173 dated 20.06.2006 and brings the Social Insurance Institution, General Directorate of Bağ-kur and General Directorate of Emekli Sandığı whose historical development are summarized above under a single roof in order to transfer five different retirement regimes which are civil servants, contractual paid workers, agricultural paid workers, self-employers and agricultural self-employers into a single retirement regime that will offer equal actuarial rights and obligations. The Social Security Institution is continuing its activities to provide better quality of services for our citizens with the participation of whole staff putting all their energy individually and institutionally.

Private

OYAK, (Ordu Yardımlaşma Kurumu/Armed Forces Pension Fund) provides its members with "supplementary retirement benefits" apart from the official retirement fund, T.C.Emekli Sandığı/SSK, to which they are primarily affiliated.

In addition to the retirement benefit, OYAK pays "disability benefits" to the members on duty when they become partially or fully disabled as well as "death benefits" to the heirs of the deceased member if the death occurs during the member's subscription to the Foundation.

OYAK is incorporated as a private entity under its own law subject to Turkish civic and commercial codes. OYAK while fulfilling its legal duties, as set in the Law, also provides its members with social services such as loans, home loans and retirement income systems.

The initial source of OYAK's funds is a compulsory 10 percent levy on the base salary of Turkey's 200,000 serving officers who, together with 25,000 current pensioners, make up OYAK's members.

Some other Turkish private pension funds:

United States

In the United States pension funds include schemes which result in a deferral of income by employees, even if retirement income provision isn't the intent.[25] The United States has $24.5 trillion in retirement and pension assets ($15.5 trillion in private funds, $9 trillion in public funds) as of June 30, 2014.[26] The largest 200 pension funds accounted for $4.540 trillion as of September 30, 2009.[27]

Government

See also

References

  1. ↑ Global Investment Review
  2. ↑ The Economist Jan 17, 2008 (economist.com)
  3. ↑ "Investment results for the third quarter of fiscal 2015" (PDF). Bloomberg. 2015.
  4. ↑ OECD
  5. ↑ For examples, see "Local Government Law Library". Retrieved 15 May 2011.
  6. 1 2 Budget of the United States Government, FY2016, as of September 30, 2014. Office of Management and Budget Retrieved March 1, 2015
  7. ↑ Government Pension Investment Fund, Japan. Gpif.go.jp. Retrieved on 2013-07-18.
  8. ↑ Market value. norges-bank.no Retrieved on 2014-04-29.
  9. ↑ Budget of the United States Government, FY2016, as of September 30, 2014. Office of Management and Budget Retrieved March 1, 2015
  10. ↑ Budget of the United States Government, FY2016, as of September 30, 2014. Office of Management and Budget Retrieved March 1, 2015
  11. ↑ http://www.ft.com/cms/s/0/9a701fd6-25e8-11e5-bd83-71cb60e8f08c.html
  12. ↑
  13. ↑ Financial Statements of the Thrift Savings Fund. As of April 14, 2014
  14. ↑ "Current Investment Fund Values". Calpers.ca.gov. Retrieved 2014-05-10.
  15. ↑ https://www.pfzw.nl/over-ons/pers/paginas/kwartaalberichten.aspx
  16. ↑ "Investments Overview". calstrs.com. Retrieved 2014-08-06.
  17. ↑ Assets under management as of September 30, 2014. cppib.com. Retrieved 2015-02-05
  18. ↑ http://www.ssf.gov.cn/cwsj/ndbg/201309/t20130928_5909.html
  19. ↑ http://www.lacaisse.com/en/results
  20. 1 2 Archived November 2, 2010, at the Wayback Machine.
  21. ↑ NPRF
  22. ↑ FRR 2012 Annual Report
  23. ↑ http://www.industrysuper.com/choose-a-fund/
  24. ↑ http://www.csspp.ro
  25. ↑ 29 USC § 1002 - Definitions | Title 29 - Labor | U.S. Code | LII / Legal Information Institute. Law.cornell.edu. Retrieved on 2013-07-18.
  26. ↑ http://www.federalreserve.gov/releases/z1/Current/z1.pdf, see pp.131-135, Federal Reserve Board of Governors, Reported December 11, 2014
  27. ↑ P&I Online
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