A pension plan administrator promises certain benefits in the future in exchange for labor today. In order to budget for this expense and create more security for the participant, the administrator uses a pension cost method. Each cost method assigns a portion of the future liability to the current year. This is called the normal cost. We calculate the normal cost under three cost methods using different annuity, interest and inflation assumptions. Then we make comparisons between cost methods as well as between assumption changes. The cost methods considered in this paper are the unit credit cost method, projected unit credit cost method, and the entry age cost method. Both the constant dollar and the constant percent versions of the entry age cost method are considered.

The role of Institutional investors in alleviating the agent problem of management and its valuation effect has been studied extensively in corporate finance. We complement this stream of research by exploring management's control over institutional investors with misaligned objectives, particularly public pension fund, and the consequential valuation effect. We investigate the politic motive of public pension fund's shareholder activism and its impact on the target firms' operational performance, address the control of a strong management on public pension funds' self-serving agenda, and finally we compare the ownership adjustment pattern of public pension funds to other institutional investors to conclude public pension funds' ownership adjustment reflects their private pursuit. The first chapter explores the politic facet and performance effect of shareholder activism sponsored by public pension fund. In this study, we show that having a public pension fund as the leading sponsor of a shareholder proposal significantly improves the proposal's likelihood of being accepted by the target firm. The increased acceptance rate sources from the subset of proposals addressing a social responsibility issue, and targeting firms with weak insider control. An investigation of the public pension board reveals that the board's political profile is the primary determinant of public pension fund's propensity to lead a proposal, and the target firm's acceptance rate. We also assess the performance impact of shareholder proposals. For target firms with strong insider control, the performance impact of accepted social responsibility proposals is significantly positive; that of governance proposals is negligible. For target firms with weak insider control, the performance impact associated with public pension funds is either negative or negligible. These results suggest that the motive driving public pension funds' dominant presence in shareholder activism is not market based, but laden with purpose other than value creation. In the second chapter, we postulate that the widely documented negative valuation effect of ownership by public pension will be weak on firms with extra managerial control mechanism and/or whose managerial ownership of cash flow is high. For firms with high level managerial ownership of cash flow, management bears higher cost for a concession made with public pension fund's misaligned objective. An efficient market will expect this effect and value the managerial control over public pension fund to the extent that the management's benefit is aligned with outside shareholders. Consequently, the cross section valuation difference of firms held by public pension funds can be explained by the managerial ownership of cash flow, managerial control derived from extra mechanism such as dual class share, however, has no explanative power. The last chapter investigates the link between private benefits and institutional holding change. We assume the cross section equilibrium of block holding will break when market sentiment is high. Consequently, block holder tends to shed more shares loaded with less private benefits by taking advantage of opportunities available in a high sentiment market. The empirical results support this conjecture. When the market sentiment is high, Institutional block holders tend to shed more private benefits meager dual-class share than private benefits affluent non-dual class share. This pattern does not exist when the market sentiment is low. Most importantly, public pension fund is identified as the major driver of this effect. / Business Administration

Between 1980-2006, thousands of South African pension funds converted members from defined benefit to defined contribution structures. This research set out to answer the questions of why this phenomenon occurred and whether peculiar environmental circumstances influenced the outcome. The research framework identified various stakeholders in the retirement fund industry - government; regulator; pension fund adjudicator; ombudsman for long term insurance; trade unions; members; trustees; business; employers and service providers - and isolated the elements to be considered in the research. Industry experts were interviewed to obtain a macro view of the phenomenon and specific manifestations of the phenomenon were also considered in case studies. The purpose of the research was to develop a model for managers to assist them in dealing with environmental change. Qualitative research methodology was utilised and feedback from semi-structured interviews was categorised into several emergent themes. Within-case and cross-case analyses were conducted. Research results indicate that the conversion phenomenon occurred in two waves - one initiated in the 1980s and driven by the trade unions and a second in the 1990s, driven by employers, often at the advice of their consultants. Evidence of the start of a third wave also emerged. Results indicate that an environmental shock exerted a substantial influence on the course of events. Under these:  Various factors combined to drive organisational evolution (i.e. adaptation to the environment).  Adaptation speed was inappropriate and exceeded that which was required for sufficient thought.  Uncertainty and vacuum circumstances arose leading to consequences that require redress.  The power of the relative stakeholders changed and influenced the strategic outcome.  An imbalance in stakeholder interests arose and ethical factors became consequential.  Business acted to restore certainty for itself. Existing literature explained organisational behaviour in environments of competitive shock and high turbulence, but not in circumstances of environmental shock. A model emerged to assist managers to deal with environmental change, which was applied to an analysis of pension fund reform. It was also applied to the pension fund perspective on Broad-Based Black Economic Empowerment. This model may also be applied in analysis of land redistribution, sanctions and constitutional development. / Business Management / DBL

Between 1980-2006, thousands of South African pension funds converted members from defined benefit to defined contribution structures. This research set out to answer the questions of why this phenomenon occurred and whether peculiar environmental circumstances influenced the outcome. The research framework identified various stakeholders in the retirement fund industry - government; regulator; pension fund adjudicator; ombudsman for long term insurance; trade unions; members; trustees; business; employers and service providers - and isolated the elements to be considered in the research. Industry experts were interviewed to obtain a macro view of the phenomenon and specific manifestations of the phenomenon were also considered in case studies. The purpose of the research was to develop a model for managers to assist them in dealing with environmental change. Qualitative research methodology was utilised and feedback from semi-structured interviews was categorised into several emergent themes. Within-case and cross-case analyses were conducted. Research results indicate that the conversion phenomenon occurred in two waves - one initiated in the 1980s and driven by the trade unions and a second in the 1990s, driven by employers, often at the advice of their consultants. Evidence of the start of a third wave also emerged. Results indicate that an environmental shock exerted a substantial influence on the course of events. Under these:  Various factors combined to drive organisational evolution (i.e. adaptation to the environment).  Adaptation speed was inappropriate and exceeded that which was required for sufficient thought.  Uncertainty and vacuum circumstances arose leading to consequences that require redress.  The power of the relative stakeholders changed and influenced the strategic outcome.  An imbalance in stakeholder interests arose and ethical factors became consequential.  Business acted to restore certainty for itself. Existing literature explained organisational behaviour in environments of competitive shock and high turbulence, but not in circumstances of environmental shock. A model emerged to assist managers to deal with environmental change, which was applied to an analysis of pension fund reform. It was also applied to the pension fund perspective on Broad-Based Black Economic Empowerment. This model may also be applied in analysis of land redistribution, sanctions and constitutional development. / Business Management / DBL

Since their creation in Europe in the seventeenth century, pension funds have grown to become one of the main sources of capital in the world. A number of role players ultimately manage the pension money of members on their behalf. Accordingly, the focus of this study is on the role players involved in the actual investment of pension fund money. For the purposes of the study, the key role players in the pension fund investment chain are identified as pension fund trustees, asset managers and asset consultants. These role players have a specific responsibility in terms of the service that they ought to provide. One of the key aspects of this dissertation is therefore determining whether their responsibility is a fiduciary responsibility. The main purpose of the study is, however, to answer one overarching research question: Does fiduciary responsibility create barriers to the implementation of responsible investment in the South African pension fund investment chain? Clearly, there are two key terms in this research question, fiduciary responsibility and responsible investment. It is suggested that responsible investment takes at least two forms: a “business case” form1 in which environmental, social and governance (ESG) issues are considered only in so far as they are financially material; and a social form in which ESG issues are considered over maximising risk adjusted financial returns. Three key questions were asked in order to find qualitative descriptions and interpretations of fiduciary responsibility: Question 1: Are the key role players in the pension fund investment chain fiduciaries? Question 2: If so, to whom do the key role players owe their fiduciary duty? Question 3: What are the fiduciary duties of the key role players in the pension fund investment chain? It is also suggested that the duty to act in the best interests of beneficiaries could be described as the all-encompassing fiduciary duty. Two main interpretations of the / Private Law / LL.M.

Thesis (MPA (Public Management and Planning))--University of Stellenbosch, 2010. / ENGLISH ABSTRACT: The South African (SA) government is experiencing problems with regard to its service delivery mandate in public institutions. These problems have resulted from a number of factors, such as SA’s history of unequal distribution of resources; the introduction of remedial legislations and programmes when the new government took office in 1994; incorrect implementation of these legislations and programmes with the accompanying departure of skilled managers accompanied by the influx of new and inexperienced managers. Deliberate interventions were introduced to address this service delivery problem however, many public institutions remain unsuccessful in fulfilling their mandate to service delivery. In this study, the Government Employees Pension Fund (GEPF) is used as a case study to learn more about the effect of corporate governance in addressing service delivery problems in public institutions. As a government entity, the GEPF experienced some service delivery problems with regard to its mandate. Like any other public entity in SA, the GEPF is governed by all legislative provisions governing public entities and is equally affected by challenges such as scarcity of resources (financial; equipment and skills). The objectives of the study is to identify major principles and techniques related to corporatisation as an approach to management practice; to identify major challenges encountered by GEPF prior to corporatisation; and to analyse the deployment of corporate arrangements in the conduct of the GEPF in relation to these techniques and principles. The basis of this research is a thorough literature study and interviews with managers of the GEPF. The major finding of this study is that the GEPF has entrusted basic duties and responsibilities affecting its mandate to employer institutions (EIs). These basic yet sensitive functions have been left arbitrarily to EIs, hence the GEPF is unable to execute its duties in its benefits administration in line with its vision. Other findings include internal processes are incorrectly applied, thus hampering effective and efficient benefits administration; there is lack of, or limited use of a performance management system; there is an inability to deal with predictable problems; and the organisation of resources does not support the vision of the GEPF. Achievements in terms of the corporatisation process to improve performance were noted. The enrolment of the services of consultants to assist the GEPF to improve its performance led to the following: approval of the organisational structure that supports the GEPF’s vision; empowerment of managers in terms of skills capacity; conversion of contract workers to permanent; and taking an aggressive approach to performance and risk management. It is therefore concluded that although challenges still exist, the GEPF has embarked on a systematic process to rid itself of the challenges it faces. / AFRIKAANSE OPSOMMING: Die Suid-Afrikaanse Owerheidsektor ervaar tans probleme ten opsigte van sy diensleweringsmandaat. Die probleme met swak dienslewering kan toegeskryf word aan faktore soos Suid-Afrika se geskiedenis van wat betref die onbillike verdeling van hulpbronne, die daarstel van ʼn nuwe regering in 1994 wat gelei het tot regstellende wetgewing en programme, die onoordeelkundige implementering van hierdie nuwe wetgewing en programme, en die gepaardgaande verlies van bekwame bestuurders en die aanstelling van nuwe en onervare bestuurders. Ten spyte van doelbewuste ingrypings om die diensleweringprobleem aan te spreek, bly owerheidsinstellings steeds in gebreke om aan hul diensleweringsmandaat te voldoen. Die Government Employees Pension Fund (GEPF) is as ʼn gevallestudie gebruik om die effek van korporatiewe bestuur op die hantering van diensleweringsprobleme in owerheidsinstellings te bepaal. Die GEPF as ʼn owerheidsinstelling ervaar ook probleme wat sy mandaat van dienslewering betref. In vergelyking met ander owerheidsinstellings ervaar die GEPF soortgelyke uitdagings ten opsigte van hulpbronverdeling (op finansiële vlak, en wat toerusting en vaardighede betref). Die doelwit van die studie is om die hoofbeginsels en -tegnieke verbonde aan korporatisering as ʼn bestuursbeleid te identifiseer, om die hoofuitdagings vir die GEPF voor intervensie op ʼn objektiewe en onbetrokke wyse te identifiseer, en om die tegnieke en beginsels aangewend sedert die implementering van die intervensie te analiseer. Hierdie studie is op ʼn deeglike literatuurstudie en die voer van onderhoude met bestuurslede van die GEPF geskoei. Die vernaamste bevinding van die studie is dat die GEPF sy basiese verpligtinge en verantwoordelikhede rakende sy mandaat aan die werkgewersinstellings toevertrou. Die basiese, dog sensitiewe funksies wat arbitrêr aan die werkgewer oorgelaat word, kniehalter die GEPF om sy administratiewe pligte volgens sy visie uit te voer. Ander bevindings sluit in dat interne prosesse op ʼn ondoeltreffende manier toegepas word, wat dan doeltreffende administrasie kortwiek. Dit sluit in die gebrek of beperkte gebruik van ʼn prestasiebestuurstelsel, die onbevoegdheid om ooglopende probleme te identifiseer en beperkte hulpbronne, wat nie die visie ondersteun nie. Die aanwending van korporatiewe prosesse om dienslewering te verbeter blyk suksesvol te wees. Die aanstelling van konsultante om behulpsaam te wees met dienslewering het gelei tot die goedkeuring van ʼn organisatoriese struktuur wat die visie van die GEPF ondersteun, die bemagtiging van bestuurders omdat hul vaardigheid verbeter is, die aanstelling van kontrakwerkers in permanente poste en ʼn aggressiewe benadering tot prestasie- en risikobestuur. Die gevolgtrekking is dat alhoewel daar nog uitdagings bestaan, die GEPF ʼn sistematiese proses onderneem het om die uitdagings te oorkom.

公務人員退撫基金雖非一般企業，但這並不表示公務人員退撫基金可以不必對「資金提供者」負責或懈怠獲致「應有報酬」之責任；公務人員退撫基金為執行特定公共任務之組織，其能否發揮制度設計所預期的功能，將直接影響公務人員退撫基金的營運績效。本研究之主要目的為探討治理變數對基金績效的影響效果。實證結果發現監理委員會的組成結構中，唯有軍公教、學者專家的係數估計值顯著異於零，其他的治理變數對基金績效的影響皆不具有顯著影響效果，另外，股價指數與資產配置對於基金績效存在顯著的作用，股價指數以及資產配置在銀行存款與短期票券，具有正的影響效果，至於配置在有價證券，可能由於受到政治的干預護盤以及對於股票市場的投資監督不佳，所以造成其負向影響效果。 由於治理變數大多對基金績效無顯著影響效果，可能肇因於退撫基金無健全的課責制度，可以考慮減少政府機關代表的數量與其角色，考量委員的代表性與專業性。此外，股市投資為影響報酬與風險最為顯著的投資工具，股價指數與有價證券的資產配置皆對基金績效有顯著的影響效果，對於股票市場的投資需要更加的小心。由於退撫基金由政府管理，欠缺彈性，其投資運用易受到官僚體系與政治因素的影響，未來退撫基金也可以朝行政法人組織來做改革。隨著基金累積金額的日漸龐大，監理委員會功能的發揮與否，與投資運用績效息息相關，將攸關未來退休者的給付與參與者的費率，如何有效發揮監理委員會的功能，是值得關注的議題。

Thesis (LLM.) -- University of Limpopo, 2017 / This dissertation deals with the inception of the office of the Pension Fund Adjudicator in South Africa with comparison with the United Kingdom and Australia. The challenges faced by the office of the Pension Fund Adjudicator are one element that advised the composition of this dissertation. South Africa is a well developing country that carries well developed laws, including, the laws that deals with the pension fund complaints and this dissertation shall analyse and unpack those laws and principles that deals with the pension fund complaints.

『勞工退休金條例』於民國94年7月1日施行後，我國的勞工退休金經營管理模式有了根本上的變化。原來舊的制度下，退休金是以確定給付的方式經營，而在新制下則是以確定提撥的模式營運。新制由於不必考慮負債面，其資產配置的自由度相對來說大幅提高。然而，為了滿足法規『投資報酬率不得低於兩年期定存利率』之限制、以及達成高所得替代率的理想，退休基金的管理者將面臨追求短期穩定、以及長期高報酬兩項互為抵換目標的困難抉擇。 如何用一套較為實務上可行的方法，為新制下的退休基金擬定一套合乎其投資目標的長期策略性資產配置，是本研究所關心的課題。本文採用的方法是以多元蒙地卡羅模擬法（Monte Carlo Simulation），依據實際的資本市場假設來模擬整個投資組合期望報酬率的機率分配，並根據結果分析各種配置的優劣、提供決策者做參考。 本研究建議新制下退休基金的理想資產配置區間為：美國股票30%~40%、國際股票20%~30%、固定收益證券20%~30%、不動產5%~15%、以及私募股權0%~10%。其中，由於退休基金在成立前期的流動性需求較低，可以配置較高的比重於股票和不動產；後期則為了定期支付退休金、可以提高固定收益證券的比重。然而，本研究發現：『提高固定收益證券比重所帶來的短期穩定之加分、將不如其所犧牲的長期高報酬之減分』，因此不建議退休基金的管理人太早提高固定收益證券的投資比重。 此外，透過情境分析與敏感性分析，本研究認為長期而言，不動產是最為穩定、且又能同時達成長期高報酬目標的最佳投資標的。至於在戰略性配置上，如果基金管理者預期未來市場可能會出現長期動盪，則應該降低私募股權的比重。

[pt] O presente trabalho objetiva identificar de que forma os fundos de pensão podem se tornar instrumentos financeiros essenciais ao financiamento da economia brasileira, levando-se em consideração o acentuado desenvolvimento e internacionalização dos mercados mundiais. Para isso, faz- se necessário avaliar seu desempenho nos mercados de capitais, bem como de que forma podem se tornar eficientes, através da otimização de sua estratégia de risco. Nesse sentido, fez-se uso de diversos modelos conhecidos na teoria de finanças, como o Modelo de Markowitz, o modelo do Índice Único de Sharpe, modelo CAPM, e as técnicas para a determinação de fronteiras eficientes de Elton e Gruber, bem como das diversas medidas de desempenho de nvestimentos existentes como: taxa de retorno ponderado pelo tempo, desvio padrão, coeficiente beta, Índice de Sharpe, Índice de Modigliani,Índice de Jensen, Índice de Treynor, Apprasial Ratio e Índice de Modigliani, para que se pudesse analisar e comparar o resultado dos 20 maiores fundos de pensão existentes no Brasil. / [en] The present objective work intend to identify the forms that the pension funds can become financial instruments essential to financing the Brazilian economy, taking in consideration the accented development and internationalization of the world-wide markets. For this one becomes necessary to evaluate its performance in the stock markets, as well as of that it forms can become efficient, through the optimization of its risk strategy. In this direction, use of diverse models known in the theory of finances became, as the Markowitz s Model, the Sharpe s Single Index Model, the Capital Asset Pricing Model - CAPM, and the techniques for the determination the efficient borders of Elton and Gruber, as well as of the diverse measures of performance of existing investments as: Return tax, standard deviation, beta coefficient, Sharpe s Index, Modigliani s Index, Jensen s Index, Treynor s Index, Appraisal Ratio and Modigliani s Index, so that if it could analyze and compare the result of the 20 existing greater pension funds in Brazil.