This paper outlines the regulatory framework within which occupational defined benefit pension plans are financed and addresses the challenges facing the funding of such plans. The Appendices include a summary and discussion of the funding...

Uncertainty about length of life, longevity risk, is a growing financial problem for pension funds and annuity providers. They would like to transfer longevity risk away to institutions better placed to deal with it. Unfortunately, there is a lack of...

The issue of pension benefit security has returned to the foreground of both economic and political debate in many OECD countries - following high profile losses of pension benefits due to plan sponsors becoming bankrupt and leaving underfunded...

This paper examines how uncertainty regarding future mortality and life expectancy outcomes, i.e. longevity risk, affects employer-provided defined benefit (DB) private pension plans liabilities. The paper argues that to assess uncertainty and...

Underfunded pension funds are in the same position as other creditors when their sponsoring firm becomes insolvent, having to join the queue claiming the remaining assets of the firm. Arguments for granting pension fund priority rights over other...

Annuities are specifically designed to cover the risk that an individual outlives their own resources by transferring such risk to an insurance undertaking. Despite an increasing need for annuity products (due to increasing longevity, decreasing...

A recent trend in individual accounts schemes is the introduction and expansion of investment alternatives to plan members. The goal of investment choice is to enable plan members to select the optimal investment portfolio that matches their...

This paper provides a stylised assessment of the impact of investment-relevant pension fund regulations and accounting rules on contribution and investment strategies within the context of an asset-liability model (ALM) specifically designed for this...

This paper assesses current regulatory and accounting developments in the OECD area against their purported goals. It specifically considers the different approaches to valuing pension liabilities and questions the possibility of convergence between...

In individual account pension systems, members bear the risks and consequences of their investment decisions. If participants behave as predicted by economic theory, such responsibility would be welfare-enhancing as members would invest and hold a...

Several countries around the globe have established mandatory pension systems based on personal savings accounts. In contrast to the pay-as-you-go (PAYG) financed pensions that these new systems have partly replaced, retirement benefits are the...

Collective pension funds (CPFs) - occupational pension funds that cover the employees of more than one employer (enterprise) - have been operating in OECD countries for decades. Generally speaking, there are two models, i.e. closed pension funds,...

Having outlined the potential concerns relating to pension fund investment in hedge funds, the OECD carried out a survey to investigate what information pension fund regulators have on these investments and how they are being controlled. The survey...

Sovereign Wealth Funds (SWFs) are pools of assets owned and managed directly or indirectly by governments to achieve national objectives. These funds have raised concerns about: (i) financial stability, (ii) corporate governance and (iii) political...

Many countries around the world are partly prefunding their otherwise pay-as-you-go (PAYG) financed social security systems by establishing or further developing existing public pension reserve funds (PPRFs). Most OECD countries have put in place...

The objective of this study is to analyse what the quantitative funding requirements for pension funds with defined benefit plans would be, if Solvency II (based on the QIS 3 methodology) would be applied. Also possible extensions of the Solvency II...

This paper provides a description of the risk-sharing features of pension plan design in selected OECD and non-OECD countries and how they correspond with the funding rules applied to pension funds. In addition to leading to a better understanding of...

Good governance is increasingly recognized as an important aspect of an efficient private pension system, enhancing investment performance and benefit security. Yet, despite regulatory and industry initiatives, governance weaknesses persist across...

This paper presents comparable and standardised data on coverage in voluntary funded pension plans for several OECD countries using household survey data by age, income level, and labour market status for occupational and personal pension plans. The...

Defined benefit pension plans can entail one of the biggest liabilities that an exchange-listed company has on its balance-sheet. There exist comprehensive requirements for the reporting of such liabilities. This paper examines the impact that...