Fueling Financialization: The Economic Consequences of Funded Pensions

Abstract

Marginal categories excluded for readability are money market fund shares, deposits and currency, and loans. The main component of "Total miscellaneous assets" are claims on the pension plan sponsor. The data include private pension funds, state and local government employee retirement funds, and federal government retirement funds. IRA assets are not included.

Here for a Good Time, Not a Long Time: Asset Managers at the Infrastructure Party

“…Founded on the reality that private firms are much more likely to go bankrupt and may be liquidated, funded pensions rely on massive pools of capital-contributions that pension funds hand to asset managers to invest. 3 Today, many public pension funds take the advice of investment consultants who have an interest in the growth of the asset manager society: some consultants have their own asset management arms, and others have been acquired by asset managers. Some large public pension funds belong to the Global Infrastructure Investor Association, a trade body that argues for the superiority of private ownership.…”

Exit, Control, and Politics: Structural Power and Corporate Governance under Asset Manager Capitalism

“…40 Funded pension systems have been the most important driver of the rise of institutional capital pools, and the chief source of growth for asset management companies. 41 Asset managers are intermediaries who invest other people's money for a fee. Just like pension funds pool the savings of many households, asset managers pool the capital of many institutional investors (as well as households).…”

Financialization and the rise of atypical work

“…Regarding the second main feature of the financialization of ‘everyday life’, the financialization of pension funds’ portfolios, this has been the main outcome of the privatization of pension funds and social security retrenchment over the last decades (Braun 2022; Engelen 2003). Still, in many cases, public pension funds have become equally or even more exposed to volatile assets than private pension schemes (Triest and Zhao 2014).…”