Pension fund

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Pension fund investments in 2005

A pension fund is a pool of assets forming an independent legal entity that are bought with the contributions to a pension plan for the exclusive purpose of financing pension plan benefits.

Pension funds are important shareholders of listed and private companies. They are especially important to the stock market where large institutional investors like the Ontario Teachers' Pension Plan 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 world-wide 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]

[edit] Classifications

[edit] 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.^[3]

Closed pension funds are further subclassified into:

• Single employer pension funds
• Multi-employer pension funds
• Related member pension funds
• Individual pension funds

[edit] 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.

[edit] Examples

[edit] Australia

See main article, Superannuation in Australia

[edit] Government

• Public Sector Supperannuation Scheme (for federal civil servants)
• Commonwealth Supperannuation Scheme (older scheme for federal civil servants)
• State Super (for New South Wales state civil servants)

[edit] Private

• The Retail Employees Superannuation Trust (Australia's largest superannuation fund by membership)^[4]
• ANZ Australian Staff Superannuation Scheme (for employees of ANZ Bank)

[edit] Canada

[edit] Government

• Caisse de dépôt et placement du Québec
• Canada Pension Plan
• Alberta Investment Management

[edit] Private

• Ontario Teachers' Pension Plan (union-controlled)
• Hospitals of Ontario Pension Plan (HOOPP)
• OMERS Administration Corporation (OMERS)

[edit] Chile

• Chile pension system

[edit] Hong Kong

• Mandatory Provident Fund

[edit] The Netherlands

• Stichting Pensioenfonds ABP (ABP)
• Stichting Pensioenfonds Zorg en Welzijn (PFZW, formerly PGGM)

[edit] Norway

• The Government Pension Fund - Global (Statens pensjonsfond - Utland)
• The Government Pension Fund - Norway (Statens pensjonsfond - Norge)

[edit] Singapore

• Central Provident Fund

[edit] United States

[edit] Government

• California Public Employees' Retirement System (CalPERS)
• California State Teachers' Retirement System (CalSTRS)
• Federal Retirement Thrift Investment Board
• Fire and Police Pension Association of Colorado (FPPA)
• Illinois Municipal Retirement Fund
• Kansas City Public School Retirement System (KCPSRS)
• Kansas Public Employees Retirement System (KPERS)
• Minnesota Public Employees' Retirement Association (MNPERA)
• Minnesota Teachers' Retirement Association (MNTRA)
• New York State Teachers' Retirement System (NYSTRS)
• Retirement Systems of Alabama
• Teacher Retirement System of Texas (TRS of Texas)

[edit] Saudi Arabia

• the general organization for social insurance

[edit] Greece

[edit] Private

• TAPILTAT

[edit] Largest pension funds

Country Fund Assets US$ (in billions) Inception Origin Approx wealth per citizen  Japan Government Pension Investment Fund $935.5 2006 Non-commodity N/A  Norway Government Pension Fund of Norway &0000000000000391.000000391 [5] 1990 Oil &0000000000081500.00000081,500  Netherlands Stichting Pensioenfonds ABP (ABP) $313 (€215) 1922 Non-commodity N/A  Canada (Quebec) Caisse de dépôt et placement du Québec (the Quebec Pension Fund $258 1965 Non-commodity N/A  United States (California) California Public Employees' Retirement System (CalPERS) $218.2 N/A Non-commodity N/A  Netherlands Stichting Pensioenfonds Zorg en Welzijn (PFZW, formerly PGGM) $123 (€85) 1969 Non-commodity N/A  Canada CPP Investment Board (Canada Pension Plan) $122.7 1997 Non-commodity $183.300  Canada (Ontario) Ontario Teachers' Pension Plan $109 1990 Non-commodity N/A  Ireland National Pension Reserve Fund (NPRF) $30[6] 2001 Non-commodity ?

[edit] Empirical study of the effects of pension fund development on global economic growth and development patterns

• Arno Tausch (2005) ‚World Bank Pension reforms and development patterns in the world system and in the “Wider Europe”. A 109 country investigation based on 33 indicators of economic growth, and human, social and ecological well-being, and a European regional case study’. A slightly re-worked version of a paper, originally presented to the Conference on “Reforming European pension systems. In memory of Professor Franco Modigliani. 24 and 25 September 2004”, Castle of Schengen, Luxembourg Institute for European and International Studies

[edit] See also

• Global assets under management
• Pension insurance contract
• Sovereign wealth fund

[edit] References

v • d • e Topics on private equity and venture capital Basic investment types Bootstrap funding · Venture · Buyout · Mezzanine · Growth · Secondaries · Equity co-investment History History of private equity and venture capital · Early history of private equity · Private equity in the 1980s · Private equity in the 1990s · Private equity in the 2000s Terms and concepts Buyout Financial sponsor · Management buyout · Divisional buyout Venture Seed money · Startup company · Angel investor · Venture capital financing · Pre-money valuation · Post-money valuation · Venture round · Venture debt Structure Private equity firms and funds · Limited partnership · Limited liability company · Carried interest · Publicly traded private equity · Private Investment in Public Equity (PIPE) Investors Institutional Investors · Pension funds · Insurance companies · Endowments · Investment Banks · Commercial Banks · Fund of funds · High net worth individuals · Family offices · Sovereign wealth funds Related financial terms Undercapitalization · Initial Public Offering (IPO) · Mergers and acquisitions · Leverage · High-yield debt · Capital structure Private equity and venture capital investors · Private equity firms · Venture capital firms · Portfolio companies