PENSION FUND
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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. 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. |
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CLASSIFICATIONS
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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.
Closed pension funds are further subclassified into:
- Single employer pension funds
- Multi-employer pension funds
- Related member pension funds
- Individual pension funds
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. |
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EXAMPLES IN THE UNITED STATES
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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)
- Retirement Systems of Alabama
- Teacher Retirement System of Texas (TRS of Texas)
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EXAMPLES IN THE CANADA
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GOVERNMENT
- Caisse de depot et placement du Quebec
- Canada Pension Plan
- Alberta Investment Management
PRIVATE
- Ontario Teachers' Pension Plan (union-controlled)
- Hospitals of Ontario Pension Plan (HOOPP)
- OMERS Administration Corporation (OMERS)
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LARGEST PENSION FUNDS
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| Country |
Fund |
Assets US$ (in billions) |
Inception |
| Japan |
Japan Government Pension Investment |
935.5 |
N/A |
| Netherlands |
Stichting Pensioenfonds ABP (ABP) |
313 |
1922 |
| Canada (Quebec) |
Caisse de depot et placement du Quebec (the Quebec Pension Fund) |
258 |
1965 |
| United States (California) |
California Public Employees' Retirement System (CalPERS) |
218.2 |
N/A |
| Netherlands |
Stichting Pensioenfonds Zorg en Welzijn (PFZW, formerly
PGGM) |
123 |
1969 |
| Canada |
CPP Investment Board (Canada Pension Plan) |
122.7 |
1997 |
| Canada (Ontario) |
Ontario Teachers' Pension Plan |
109 |
1990 |
| Ireland |
National Pension Reserve Fund (NPRF) |
30 |
2001 |
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EMPIRICAL STUDY OF THE EFFECTS OF PENSION FUND
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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. |
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