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 Federal Old-age and Survivors Insurance Trust Fund is the world's largest public pension fund which oversees $2.645 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) Reporting
Period		 Inception Origin
 United States Federal Old-age and Survivors Insurance Trust Fund (Social Security) $2722[6] 2016 1935 Non-commodity
 Australia Australian National Superannuation Scheme $2199
 Japan Government Pension Investment Fund $1103[7] 2015 2006 Non-commodity
 Norway Government Pension Fund of Norway $898[7] 2015 1990 Oil
 United States Civil Service Retirement and Disability Fund $880[8] 2016 1920 Non-commodity
 United States Military Retirement Fund $584[9] 2016 Non-commodity
 United States Thrift Savings Plan (TSP) $443[10] 2015 1986 Non-commodity
 South Korea National Pension Service (NPS) $419[7] 2015 1988 Non-commodity
 Netherlands Stichting Pensioenfonds ABP (ABP) $388[11] (€344) 1922 Non-commodity
 United States (California) California Public Employees' Retirement System (CalPERS) $289.8[12] 1932 Non-commodity
 China National Social Security Fund $251[7] 2015 2000 Non-commodity
 Canada Canada Pension Plan and CPP Investment Board $217[7] 2015 1965 Non-commodity
 Singapore Central Provident Fund $208[13] 2014 1955 Non-commodity
 United States (California) California State Teachers' Retirement System (CalSTRS) $206.5[14] 2017 1913 Non-commodity
 Netherlands Stichting Pensioenfonds Zorg en Welzijn (PFZW, formerly PGGM) $183[15] (€162) 1969 Non-commodity
 Malaysia Employees Provident Fund $185[13] 2014 1991 Non-commodity
 Canada (Quebec) Caisse de dépôt et placement du Québec (The Caisse, or CDPQ) $176[16] 1965 Non-commodity
 Canada (Ontario) Ontario Teachers' Pension Plan $171.4[17] 2015 1989 Non-commodity
 Chile AFP $160[18] 2014 1980 Non-commodity
 South Africa Government Employees Pension Fund (GEPF) $112 (ZAR1426b) 1996 Non-commodity
 India Employees' Provident Fund Organisation (EPFO) $123[7] 2015 1952 Non-commodity
 Denmark Arbejdsmarkedets Tillægspension (ATP) $119[19] 2015 1964 Non-commodity
 Brazil Caixa de Previdencia dos Funcionários do Banco do Brasil (PREVI) $80 1904 Finance
 France AGIRC - ARRCO $70[7] 2015 2001 Non-commodity
 Ireland National Pension Reserve Fund (NPRF) $30[20] 2001 Non-commodity
 France Pensions Reserve Fund (France) (NPRF) $56[21] 2001 Non-commodity

By country

Australia

Government

Industry (not-for-profit)[22]

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 $19.1 trillion in retirement and pension assets ($9.1 trillion in private funds, $10 trillion in public funds) as of December 31, 2016.[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. ↑ Budget of the United States Government, FY2018, published May 23, 2017. Value as of September 30, 2016 Office of Management and Budget Retrieved May 23, 2017
  7. 1 2 3 4 5 6 7 "Annual Survey of Large Pension Funds and Public Pension Reserve Funds" (PDF). OECD. 2016-04-21. Retrieved 2016-10-28.
  8. ↑ Budget of the United States Government, FY2018, published May 23, 2017. Value as of September 30, 2016. Office of Management and Budget Retrieved May 23, 2017
  9. ↑ Budget of the United States Government, FY2018, published May 23, 2017. Value as of September 30, 2016. Office of Management and Budget Retrieved May 23, 2017
  10. ↑ Financial Statements of the Thrift Savings Fund December 31, 2015 and 2014. As of December 31, 2015. Thrift Savings Fund. Retrieved May 18, 2017
  11. ↑
  12. ↑ "Current Investment Fund Values". Calpers.ca.gov. Retrieved 2014-05-10.
  13. 1 2 "The world’s 300 largest pension funds – year end 2014". Willis Towers Watson.
  14. ↑ "Investments Overview". calstrs.com. Retrieved 2017-06-11.
  15. ↑ https://www.pfzw.nl/over-ons/pers/paginas/kwartaalberichten.aspx
  16. ↑ http://www.lacaisse.com/en/results
  17. ↑ https://www.otpp.com/investments/performance
  18. ↑ http://www.emol.com/noticias/economia/2015/01/23/700604/donde-estan-invertidas-las-platas-de-los-trabajadores-en-chile.html
  19. ↑
  20. ↑ NPRF
  21. ↑ FRR 2012 Annual Report
  22. ↑ http://www.industrysuper.com/choose-a-fund/
  23. ↑ Archived November 2, 2010, at the Wayback Machine.
  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. ↑ Federal Reserve Statistical Release, Financial Accounts of the United States, Fourth Quarter 2016, see pp.94-99. Values as of December 31, 2016. Federal Reserve Board of Governors. Reported March 9, 2017. Retrieved May 18, 2017
  27. ↑ P&I Online
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