Pension fund

In general, a capital stock with the purpose of guaranteeing employees a pension after they retire. As global arbitrageurs and speculators, as buyers of often risky securities and even works of art, pension funds have come under particular scrutiny by the supervisory authorities in recent years. However, they have not been subject to financial supervision until now. – CALPERS (California Public Employee Retirement System: a fund of Californian public employees) alone currently manages assets of over USD 100 billion. – In Germany, in the narrower sense, the funds authorized and supervised by their own “Altersvorsorgeverträge-Zertifizierungsgesetz” (Retirement Provision Contracts Certification Act), which are allowed to conclude contracts under the Retirement Assets Act. They are considered professional clients under Section 31a of the German Securities Trading Act (WpHG). – In the USA, the United Kingdom and Switzerland, a significant proportion of retirement provision is financed using the funded method. Fund managers act according to professional risk diversification criteria. These are not only important for the development of the stock market as buyers of securities. They also help to level out the asymmetric information. On the other hand, however, in view of the financial crisis that followed the subprime crisis in 2007, it became apparent that fund managers had also added risky securities of all kinds to their portfolios, some of which had to be written down to zero. – See expiration fund, Retirement Assets Act, Retirement savings institution, Investor protection, Qualifying period, Balanced, Banking regulation paradox, Civil service associations, Balance sheet, Holistic, Bogey, Contractual trust arrangement, Credit default swap, Destinarian, Salary sacrifice, In-house fund, Loan securitization, life insurance, life annuity, nominal value guarantee, Occupational Pensions Regulatory Authority, pension fund directive, pension fund, pension obligations, plan assets, prudent man standard of care, rabbi trust, rule, golden, regulatory arbitrage, special funds, straitjacking, tontine, trust models, certification. – Cf. Monthly Report of the Deutsche Bundesbank of July 2002, p. 25 ff, BaFin Annual Report 2005, p. 81 (regulation on pension fund reporting that came into force in October 2005), BaFin Annual Report 2006, p. 80 (new regulation regarding the supervisory treatment of pension plans), p. 86 (ordinance on actuarial reserves; capital adequacy ordinance), BaFin Annual Report 2007, pp. 104 f. (planned flexibilization of coverage rules), BaFin Annual Report 2008, p. 74 (Pension Fund Minimum Funding Ordinance), p. 103 (losses in value due to the financial crisis; BaFin forecast), BaFin Annual Report 2009, pp. 238 ff. (certifications; certification requirement for basic contracts; enumeration of certification requirements), BaFin Annual Report 2010, p. 121 (resilient economic situation of pension funds), BaFin Annual Report 2011, p, 93 ff. (fundamental and current supervisory issues; IOPS standards), BaFin Annual Report 2013, p. 140 (overview of pension funds’ assets) as well as the respective annual report of BaFin (there also statistical and supervisory issues each time), and also the ongoing coverage in the “Euro Area Statistics” in the respective monthly report of the ECB; ECB Monthly Report of June 2005, p. 19 ff. (Pensionskassen as financial intermediaries). – In the monthly statistical supplement “Capital Market Statistics” of the Deutsche Bundesbank, also figures on the number, volume of funds and assets of domestic pension funds, broken down by various aspects. In the respective annual report “Statistics on primary insurance companies and pension funds” published by BaFin, also overview of contributions, investments and the earnings situation of companies in Germany, as well as other key figures with explanations, Deutsche Bundesbank Monthly Report of March 2014, p. 18 (pension funds as part of the shadow banking system).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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