Best-Practice Pension Fund Governance

Clark, Gordon L.; Urwin, Roger

doi:10.1007/978-3-319-30794-7_13

Cited by 24 publications

(36 citation statements)

References 15 publications

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“…We apply this literature to occupational pension schemes in Switzerland. In line with those findings, we hypothesize that trustee board size is negatively related to the investment performance of Swiss pension funds 14 • However, while we also acknowledge that large boards might be more difficult to manage and are thus less effective, we challenge the notion that there is an absolute number of trustees that is optimal (as suggested by CLARK and URWIN, 2008) irrespective of the size of the fund. Since we expect that larger pension funds will naturally have larger trustee boards, we decline a "one-size-fits-all" approach and put board size in relation to pension fund size.…”

supporting

confidence: 64%

Is Governance Related to Investment Performance and Asset Allocation? Empirical Evidence from Swiss Pension Funds

Ammann¹,

Ehmann²

2017

Swiss J Economics Statistics

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This study investigates the relationship between governance, investment performance and asset allocation of pension funds in Switzerland. Our sample includes survey data from 139 Swiss occupational pension plans for which we develop a governance metric comprising attributes of organisational design, management incentives, target setting, investment strategy, investment processes, risk management, monitoring, and transparency. We find empirical evidence that pension fund governance is positively related to excess returns, benchmark outperformance and Sharpe ratios. Pension funds in the top governance quartile outperform those in the bottom quartile by approximately 1% in terms of average excess returns and benchmark deviation. Furthermore, our study results indicate that asset allocation decisions are not related to governance, but rather to institutional factors.

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supporting

confidence: 64%

Is Governance Related to Investment Performance and Asset Allocation? Empirical Evidence from Swiss Pension Funds

Ammann¹,

Ehmann²

2017

Swiss J Economics Statistics

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“…A comparison of the TGPF member allocation and returns to the default plan shows a disconnection with the pension requirements of TGPF members. Whilst the TPGF pension managers have a professional and ethical responsibility to financially engineer default plans (Clark and Urwin, 2008;Sundali and Guerrero, 2009), they may be hampered by political regulations. TGPF is currently applying to have the allocation ceilings relaxed and, whilst they have not yet been successful, this should remain a high priority.…”

Section: Resultsmentioning

confidence: 99%

Asset Allocations in a Thai Defined Contribution Fund: A Behavioural Experiment Conditioned on Financial Expertise

et al. 2015

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This paper reports the results of a behavioural experiment on the ability of Thai individuals to make informed investment decisions under a defined contribution self-management option. Using an asset allocation dataset from members of the Thai Government Pension Fund (TGPF) and a control sample of financially knowledgeable individuals (MBA finance students), we report that TGPF members are relatively more risk averse, exhibit a greater home investment bias, and overreact to market price movements. Financially savvy MBA students hold more shares and international securities, and earn greater long-term returns. The fact that the emotional TGPF members' allocations outperform the TGPF default plan, along with strong preferences for time liquidity diversification, provide challenges for TGPF managers to review their financial engineering and to lobby for a revision of the restrictive investment ceilings.

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“…A series of seminal papers by Clark and Urwin (2008a,b, 2010) brought together several strands of research and laid the foundation for the modern approach to governance of institutional investors. Their work, based on empirical research and inductive analytical logic, produced an internally consistent and comprehensive framework that can be used to evaluate how individual asset owners match up against an idealistic set of best practices.…”

Section: Designing An “Ideal” Pension Fundmentioning

confidence: 99%

“…Therefore, the two budgets must be synchronized: the investment process must be supported by a commensurate institutional capacity. A properly sized and well‐conceived governance budget is an indispensable building block in the overall governance structure of our “ideal” pension fund, which Clark and Urwin () deconstruct using the Twelve Principles of Best Practices described below.…”

Section: Designing An “Ideal” Pension Fundmentioning

confidence: 99%

Public Pension Fund Management: Best Practice and International Experience

Rozanov

2015

Asian Economic Policy Review

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As Japan's policymakers strive to reform the Government Pension Investment Fund, this paper reviews the core principles and best practices of public pension fund management, with a particular focus on governance and investment philosophy, as distilled from the experience of some of the largest and most advanced institutional investors. It proceeds to compare and contrast three distinct models of institutional fund management: the Norway model, the Yale/Australia Future Fund model, and the Canada model. The paper concludes by making some preliminary recommendations for the Government Pension Investment Fund reform.

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Best-Practice Pension Fund Governance

Cited by 24 publications

References 15 publications

Is Governance Related to Investment Performance and Asset Allocation? Empirical Evidence from Swiss Pension Funds

Is Governance Related to Investment Performance and Asset Allocation? Empirical Evidence from Swiss Pension Funds

Asset Allocations in a Thai Defined Contribution Fund: A Behavioural Experiment Conditioned on Financial Expertise

Public Pension Fund Management: Best Practice and International Experience

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