Publication
The case of Netherlands’ Bouwen & Pensioen : rethinking pension investing
| Summary: | This paper analyses the challenges posed by the low-yield environment and aging population on pension funds asset management. A newly-created, fictional collective defined contribution pension fund is presented, Bouwen & Pensioen, being the result of the merger of 6 smaller defined benefit funds. Cash equivalent transfer values for each member are calculated and it is found that the new pension fund faces a deficit funding ratio. A forecasting model for the operations of Bouwen & Pensioen is derived. Tests are conducted on relevant variables using the derived model. A proposal is made to the newly-created pension fund regarding the solidarity reserve mechanism and the investment strategy to follow. The proposals allow Bouwen & Pensioen to attain a 100% funding ratio by the end of the forecasted period, keeping the flow of pension payments equitable and fair across generations. |
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| Main Authors: | Pereira, António Miguel de Jesus |
| Subject: | low-yields aging population pension funds solidarity reserve investment strategy |
| Year: | 2022 |
| Country: | Portugal |
| Document type: | master thesis |
| Access type: | open access |
| Associated institution: | Universidade de Lisboa |
| Language: | English |
| Origin: | Repositório da Universidade de Lisboa |
| Summary: | This paper analyses the challenges posed by the low-yield environment and aging population on pension funds asset management. A newly-created, fictional collective defined contribution pension fund is presented, Bouwen & Pensioen, being the result of the merger of 6 smaller defined benefit funds. Cash equivalent transfer values for each member are calculated and it is found that the new pension fund faces a deficit funding ratio. A forecasting model for the operations of Bouwen & Pensioen is derived. Tests are conducted on relevant variables using the derived model. A proposal is made to the newly-created pension fund regarding the solidarity reserve mechanism and the investment strategy to follow. The proposals allow Bouwen & Pensioen to attain a 100% funding ratio by the end of the forecasted period, keeping the flow of pension payments equitable and fair across generations. |
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