Jumping over a low hurdle: personal pension fund performance

Petraki, Anastasia; Zalewska, Anna

doi:10.1007/s11156-015-0546-9

Cited by 7 publications

(6 citation statements)

References 68 publications

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“…The significant but weaker relationship between flow and poor return could be because of the existence of a disposition effect whereby investors do not sell funds that perform poorly, staying invested in the hope that the fund price returns to the original purchase price, as pointed out by Shefrin and Statman (1985). On the other hand, pension funds’ lack of challenging long-term performance targets could urge the investors to realize significant positive returns earlier (Petraki and Zalewska, 2015).…”

Section: Empirical Findings and Discussion Of Resultsmentioning

confidence: 99%

Private pension fund flow, performance and cost relationship under frequent regulatory change

Erzurumlu

Ucardag²

2021

JFRC

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Purpose This paper aims to investigate private pension fund investor sentiment against fund performance and cost in an environment of frequent regulatory changes. The analyses are conducted in a low return, high-cost private pension fund market environment, which makes it easier to observe the relationship between investor sentiment to return and cost. Design/methodology/approach This paper conducts fixed effect, random effect and random effect within between effect panel data analyses of all Turkish private pension funds from 2011 to 2019. This paper conducts the analyses using aggregate data and subsets based on fund characteristics and pre-post regulation periods. Findings When regulations provide compensation and improve market efficiency in a pension fund market, investor focus shifted from performance to cost. Investors allocated assets with respect to return realization when adequately compensated for risk or had favorable cost contract clauses. Consequently, investors in pension funds with lower expected returns and no special fee reduction clauses tended to adopt the strategy of cost minimization. Research limitations/implications The overlap of regulatory change periods could complicate the ability to distinguish the impact of any one specific change. The findings therefore cannot be generalized to differently structured markets. Practical implications Regulatory changes could lead to a switch of investor objectives. When regulatory changes compensate investors and increase market efficiency, investors objective could switch from performance to cost. Originality/value This study investigates investor sentiment in a relatively young private pension fund market, in which the relevant regulatory body ambitiously implements frequent changes in regulation. The selected market is unique in the sense that it has negative real returns and high costs, which make investor focus to return and cost more readily apparent.

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Section: Empirical Findings and Discussion Of Resultsmentioning

confidence: 99%

Private pension fund flow, performance and cost relationship under frequent regulatory change

Erzurumlu

Ucardag²

2021

JFRC

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“…This study uses the funded ratio and excess return approaches because they are also used in the literature by Aubry et al. (2018), Petraki and Zalewska (2017) and Rao et al. (2020).…”

Section: Methodsmentioning

confidence: 99%

“…The performance variables comprise actual return on investment (AROI) and expected return on investment (EROI). The AROI is the return generated from assets allocated, and the EROI is the estimated return or benchmark from the assets allocated, as in the study by Glassman, 2015;Petraki andZalewska, 2017 andRao et al, 2020. 3.1.2 Solvency and performance persistence. The solvency and performance persistence data are generated from the solvency and performance results.…”

Section: Ajems 144mentioning

confidence: 99%

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Solvency and performance persistence of defined benefit private and public pension plans

Mfoutou

Xie

2022

AJEMS

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PurposeThis study aims to examine the solvency and performance persistence of defined benefit private and public pension plans (DBPPs) in the Republic of Congo.Design/methodology/approachThe authors use the 2 × 2 contingency table approach and the time product ratio (TPR)-based cross-product ratio (CPR) on data covering ten years from 2011 to 2020, with variable funded ratios and excess returns, to determine the solvency and performance persistence of defined benefit pension plans.FindingsThe authors document a lack of solvency and performance persistence in DBPP funds. They conclude that the solvency and performance of DBPP funds are not repetitive. The previous year's private and public defined benefit pension funds’ results do not repeat in the current year. Hence, the current solvency and performance of defined benefit pension funds are not good predictors of future funds' solvency and performance.Originality/valueTo the best of the authors’ knowledge, this study is the first to combine solvency and performance to examine the persistence of defined benefit pension plans in sub-Saharan Africa.

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“…Here a careful analysis of costs and benefits is required. As it is, the pension industry around the world struggles to earn appropriate rates of return (e.g., Coggin et al, 1993;Antolin, 2008;Hinz et al 2010, Petraki andZalewska, 2013). It is unlikely that the increase in fees needed to compensate pension funds for costs of getting involved in corporate governance monitoring, will be lower than additional returns earned on their investments.…”

Section: Understanding Alternative Regulatory Approachesmentioning

confidence: 99%

Challenges of corporate governance: Twenty years after Cadbury, ten years after Sarbanes–Oxley

Zalewska¹

2014

Journal of Empirical Finance

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This paper sets the background to the Special Issue of the Journal of Empirical Finance on Challenges of Corporate Governance. It identifies the alternative approaches that can be taken to solve agency problems stemming from asymmetries of information: (i) ex-post monitoring through audit and information provision, (ii) ex-ante monitoring through boards, and (iii) incentivisation through the alignment of managerial incentives with shareholders. It discusses how the UK and the US have responded to corporate failures and relates the development of regulation in these countries to the three alternative approaches. It concludes with a discussion of three groups of challenges: (i) understanding alternative regulatory approaches, (ii) determining the importance of geo-diversity of business culture, and (iii) overcoming the problems of the political economy of corporate governance.Acknowledgements: I would like to thank all participants of the conference "Challenges of corporate governance: Twenty years after Cadbury, ten years after Sarbanes-Oxley", 24-25 June 2013, for making the conference such a great and successful event. In particular, I would like to thank Professor Kevin Murphy and Professor David Yermack for their inspiring talks as the Keynote speakers and during the conference interactions. I would also like to thank Lord Ian MacLaurin, Lord Christopher Tugendhat, Sir Julian Horn-Smith, Philip Lowe and Charles Tilley for a fantastic panel discussion. Last, but not least, I would like to thank the School of Management for hosting the event, the Journal of Empirical Finance for hosting this special issue and the Research Committee and anonymous Referees for their support in selecting papers for the Conference and this Special Issues.

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Jumping over a low hurdle: personal pension fund performance

Cited by 7 publications

References 68 publications

Private pension fund flow, performance and cost relationship under frequent regulatory change

Private pension fund flow, performance and cost relationship under frequent regulatory change

Solvency and performance persistence of defined benefit private and public pension plans

Challenges of corporate governance: Twenty years after Cadbury, ten years after Sarbanes–Oxley

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