OECD Working Papers on Insurance and Private Pensions

Policy Action in Private Occupational Pensions in Japan since the Economic Crisis of the 1990s
1993-6397 (online)
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Selected studies on insurance and private pensions policy prepared for use within the OECD and addressing such policy issues as risk management, governance, types of investments, and benefit protection. This working papers series has been discontinued; it is superseded by ‘OECD Working Papers on Finance, Insurance and Private Pensions’ available via: http://dx.doi.org/10.1787/20797117.
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Mark Number Date TitleClick to Access
  N° 41   01 Feb 2010 Click to Access:  Policy Action in Private Occupational Pensions in Japan since the Economic Crisis of the 1990s
Ministry of Health, Labour and Welfare, Japan, Junichi Sakamoto
The public pension system of Japan provides coverage for all, irrespective of occupation and income. Corporate pension plans provide additional benefits over the public pension in order to meet the diversified financial needs in retirement and play a key role in enriching people‘s life after...
  N° 40   01 Feb 2010 Click to Access:  Pension Funds' Risk-Management Framework
Fiona Stewart
Drawing on the experience of the pensions and other financial sectors, this paper examines what sort of risk-management framework pension funds should have in place. Such frameworks are broken down into four main categories: management oversight and culture; strategy and risk assessment;...
  N° 38   01 Mar 2010 Click to Access:  Managing Investment Risk in Defined Benefit Pension Funds
Dorothee Franzen
This paper inquires into the forces that drive the practice of risk management at defined benefit (DB) pension funds in Germany, Netherlands, United Kingdom and the United States in the aftermath of the perfect pension storm. First, pension funds‘ risk management is grounded in the context of...
  N° 37   01 July 2009 Click to Access:  Investment Regulations and Defined Contribution Pensions
Pablo Antolín, Sandra Blome, David Karim, Stéphanie Payet, Gerhard Scheuenstuhl, Juan Yermo
This paper assesses the impact of different quantitative approaches to regulate investment risk on the retirement income stemming from defined contribution (DC) pension plans. It looks at how such regulations affect the spectrum of investment policies available and, through this channel, how...
  N° 36   01 Apr 2009 Click to Access:  Private Pensions and Policy Responses to the Financial and Economic Crisis
Pablo Antolín, Fiona Stewart
This paper discusses responses to current financial and economic crisis by regulators, supervisors and policy makers in the area of private pensions. These responses are examined in the light of international guidelines, best practices and recommendations to improve the design of private pensions.
  N° 35   01 Mar 2009 Click to Access:  Defined-Contribution (DC) Arrangements in Anglo-Saxon Countries
John Ashcroft
This paper provides a comparative analysis of defined contribution (DC) pension systems in Australia, Ireland, the United Kingdom and the United States. There are considerable similarities in the systems which have evolved out of employer sponsored trust-based defined benefit (DB) systems and...
  N° 34   01 Mar 2009 Click to Access:  Evaluating the Design of Private Pension Plans
Hans J. Blommestein, Pascal Janssen, Niels Kortleve, Juan Yermo
The principal purpose of this paper is to analyse the trade-off between the uncertainty in contributions on the one hand and benefits on the other that is embedded in different pension arrangements. The paper employs the funding ratio (ratio of assets to liabilities) and the replacement rate...
  N° 33   01 Jan 2009 Click to Access:  Licensing Regulation and the Supervisory Structure of Private Pensions
Yu-Wei Hu, Fiona Stewart
China currently has a highly diversified structure of pension regulation and supervision. In this paper we first review the legal framework of private pension fund regulation and supervision in other economies, including Australia, Chile, Hong Kong China, Poland, Turkey, the United Kingdom and...
  N° 32   01 Jan 2009 Click to Access:  Pension Fund Investment in Infrastructure
Georg Inderst
As the need for investment in infrastructure continues to grow, private sector financing for infrastructure projects has developed around the world. Given the long-term growth and (potentially) low correlation aspects of infrastructure investments, pension funds have also shown interest in...
  N° 31   01 Jan 2009 Click to Access:  Pension Coverage and Informal Sector Workers
Yu-Wei Hu, Fiona Stewart
Pension reform around the world in recent decades has focused mainly on the formal sector. Consequently, many of those working in the informal sector have been left out of structured pension arrangements, particularly in developing countries – a serious problem given this group are often low...
  N° 30   01 Jan 2009 Click to Access:  Pensions in Africa
Fiona Stewart, Juan Yermo
This paper discusses why the development of pension systems is important for the African region. It also looks at the current pension arrangements in selected African countries. The paper was designed as an overview/background document to provide context and assist discussion at the OECD/IOPS...
  N° 29   01 Dec 2008 Click to Access:  Ageing and the Payout Phase of Pensions, Annuities and Financial Markets
Pablo Antolín
This paper reviews the impact of ageing on private pensions, in particular on the payout phase, assesses the part that annuities can play in financing retirement, and examines the role of financial markets in facilitating the allocation on assets accumulated in defined contribution pension...
  N° 27   01 Sep 2008 Click to Access:  Fees in Individual Account Pension Systems
Waldo Tapia, Juan Yermo
This paper focuses on the fees that are charged to participants in mandatory, defined contribution pension systems, focusing on the experience of Latin America, Central and Eastern Europe, Australia, and Sweden. In order to compare fees across countries, this paper looks at the evolution of a...
  N° 26   01 Sep 2008 Click to Access:  Forms of Benefit Payment at Retirement
Pablo Antolín, Colin Pugh, Fiona Stewart
This paper focuses on describing the international practice on the various forms of retirement benefit payment currently allowed in countries throughout the world and the regulatory environment surrounding these different forms of benefit payment. The analysis suggests considerable variance...
  N° 25   01 Sep 2008 Click to Access:  Policy Options for the Payout Phase
Pablo Antolín
This paper assesses how countries‘ pension arrangements and regulation shape the appropriate structure and flexibility of retirement payout options. The paper aims at providing a guide to policy makers on how to address the diverse questions posed when designing the payout phase or promoting DC...
  N° 24   01 Sep 2008 Click to Access:  National Annuity Markets
Rob Rusconi
This paper describes a number of national annuity markets, the types of products typically available, the demand for these products, the value for money on offer and the dynamics of the supply side. It explores supply and demand characteristics, asking what the main forces are that drive these...
  N° 23   01 Aug 2008 Click to Access:  Accounting for Defined Benefit Plans
Clara Severinson
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 defined benefit pension plans had on the financial...
  N° 22   01 Sep 2008 Click to Access:  Description of Private Pension Systems
Waldo Tapia
The role of private pensions in the provision of retirement income has grown significantly in the past two decades, reflecting efforts by many countries to trim down unsustainable pay-as-you-go benefits. The role of private provision of retirement income is visible in countries with mature...
  N° 21   01 Sep 2008 Click to Access:  Comparing Aggregate Investment Returns in Privately Managed Pension Funds
Waldo Tapia
This report presents an initial assessment of the financial performance of privately managed pension funds, both mandatory and voluntary, in Latin America and Central and Eastern Europe, as well as selected OECD countries. It provides a comparative description of private pension funds in the 23...
  N° 20   01 Aug 2008 Click to Access:  Pension Fund Performance
Pablo Antolín
This report provides an analysis of aggregate investment performance by country on a risk adjusted basis using relatively standard investment performance measures. The report also describes privately managed pension funds around the world and the regulatory environment they face. It compares...
  N° 19   01 July 2008 Click to Access:  Coverage of Funded Pension Plans
Pablo Antolín
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 analysis suggests that coverage is unevenly...
  N° 18   01 June 2008 Click to Access:  Pension Fund Governance
Fiona Stewart, Juan Yermo
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 OECD and non-OECD countries. This paper...
  N° 17   01 Apr 2008 Click to Access:  Funding Regulations and Risk Sharing
Colin Pugh, Juan Yermo
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 differences in funding rules across...
  N° 16   01 Mar 2008 Click to Access:  Evaluating the Impact of Risk Based Funding Requirements on Pension Funds
Jordy Peek, Andreas Reuss, Gerhard Scheuenstuhl
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 methodology that seem necessary in order to...
  N° 15   01 Jan 2008 Click to Access:  Governance and Investment of Public Pension Reserve Funds in Selected OECD Countries
Juan Yermo
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 internal and external governance mechanisms and...
  N° 14   01 Jan 2008 Click to Access:  Sovereign Wealth and Pension Fund Issues
A. Blundell-Wignall, Yu-Wei Hu, Juan Yermo
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 interference and protectionism. At the same...
  N° 13   01 July 2007 Click to Access:  Reforming the Valuation and Funding of Pension Promises
Juan Yermo
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 funding and business accountants' valuation...
  N° 12   01 Sep 2007 Click to Access:  Pension Fund Investment in Hedge Funds
Fiona Stewart
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 confirms that pension fund regulators have...
  N° 11   01 July 2007 Click to Access:  Implications of Behavioural Economics for Mandatory Individual Account Pension Systems
Waldo Tapia, Juan Yermo
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 portfolio of financial assets with a...
  N° 10   01 July 2007 Click to Access:  Portfolio Investment in an Intertemporal Setting
Guillermo Larrain Rios
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 outcome of an investment process. As a result, the...
  N° 9   01 Aug 2007 Click to Access:  Collective Pension Funds
Yu-Wei Hu, Colin Pugh, Fiona Stewart, Juan Yermo
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, with membership restricted to a particular...
  N° 8   01 May 2007 Click to Access:  Pension Fund Regulation and Risk Management
Sandra Blome, Kai Fachinger, Dorothee Franzen, Gerhard Scheuenstuhl, Juan Yermo
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 purpose. The analysis identifies a...
  N° 7   01 Jan 2007 Click to Access:  Survey of Investment Choice by Pension Fund Members
Edina Rozinka, Waldo Tapia
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 particular risk-return preference and ultimately,...
  N° 6   01 Jan 2007 Click to Access:  Benefit Protection
Fiona Stewart
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 creditors are the same as for introducing...
  N° 5   01 Jan 2007 Click to Access:  Benefit Security Pension Fund Guarantee Schemes
Fiona Stewart
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 pension schemes. Some countries have dealt with...
  N° 4   01 Jan 2007 Click to Access:  Governments and the Market for Longevity-Indexed Bonds
Pablo Antolín, Hans J. Blommestein
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 financial instruments to hedge against this...
  N° 3   01 Jan 2007 Click to Access:  Longevity Risk and Private Pensions
Pablo Antolín
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 associated risks adequately, a stochastic approach...
  N° 2   01 Jan 2007 Click to Access:  Policy Issues for Developing Annuities Markets
Fiona Stewart
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 state pensions, a rise in Defined Contribution...
  N° 1   01 Oct 2006 Click to Access:  Funding Rules and Actuarial Methods
Colin Pugh
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 regulations in twelve OECD countries plus Brazil – all...
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