Portfolio Limits : Pension Investment Restrictions Compromise Fund Performance

World Bank

World Bank, Washington, DC

关键词: ADVERSE EFFECTS;    ANNUAL RETURN;    ASSET PRICES;    ASSETS;    BENCHMARK;   

RP-ID  :  33383

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The value of funded pensions can dependcritically on the funds' investment performance. To tryand protect people's savings, governments oftenregulate pension funds strictly, particularly whencontributions are mandatory. For example, the new fundedpension systems in Latin America and Eastern Europe are morestringently regulated than private pensions in OECDcountries, which are mainly voluntary. While these pensionfund regulations take three different forms, this briefingfocuses on one of these: quantitative restrictions onpension funds' portfolios. Quantitative restrictions onthe share of particular types of assets held by the fundlimit the dispersion of outcomes, particularly for definedcontribution schemes. In most mandatory schemes, this leadsto a 'single portfolio' environment where membersof the scheme are forced to hold basically the sameportfolio. Most common are limits on risky assets such asshares and corporate bonds. Often, foreign investments arecurtailed. This review includes a look at the adverseeffects of portfolio limits, and argues for relaxinginvestment rules so that pension funds can reap the benefitsfrom international diversification.