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Companies and indeed governments all over the world have tried to secure the future of their employees by setting up pension schemes (Wallace 2002). However, pension contributions might become a huge unbearable expenditure for some organizations, as this presentation will show. While initially most companies willing to set up a pension scheme would almost always regard the Defined Benefit (DB) Pension Scheme as the scheme of first choice, the trend has since changed (Ross and Wills 2002) over the years. Possible causes responsible for this shift in focus are many (Twinney 1995). The shift could have contributed to some companies sponsoring Defined Benefit schemes to have a rethink on which type of pension scheme to operate. Zambezi River Authority is a quasi-government entity operating in both Zambia and Zimbabwe. It set up a DB pension scheme for its employees in 1987 and has not been spared from this pressure to re-examine its pension fund. In recent years the Zambezi River Authority Pension Scheme has recorded huge shortfalls (Zambezi River Authority Pension Scheme Accounts 1999 to 2004). This has resulted in the employer struggling to pay up his pension obligations. Sooner or later, if nothing is done, the pension scheme will probably not be able to meet the objectives for which it was set up. The purpose of this study is to investigate and discuss the problems being faced by the Zambezi River Authority Pension Scheme. The paper outlines the different types of pension funds and compares them with the type of fund the Zambezi River Authority operates. The results of this study show that while the benefit structure of the Zambezi River Authority Pension Fund could have been relevant at the time the fund was set up, circumstances have substantially changed from what they were then. It is argued in the study that if no action is taken, the Zambezi River Authority Pension Scheme is likely to collapse. It is recommended in the study that the Zambezi River Authority Pension Scheme should be changed from a Defined Benefit Scheme to a Defined Contribution Scheme. It is also recommended that the management of the scheme should be changed and that the scheme should invest in portfolios that bring positive returns. Above all, it is recommended that members should take a more active role in the affairs of their pension scheme. / Thesis (MBA)-University of KwaZulu Natal, 2006.

Pensionssystemet berör samtliga pensionssparare i Sverige som statliga Pensions-myndigeten ansvarar för. En reform av pensionssystemet introducerades år 1999 och togs i bruk år 2000 som innebar att individen fick ökat ansvar genom att 2,5 procent av den allmänna pensionen, benämnd premiepensionen, kunde fritt placeras i öns-kade fonder inom premiepensionssystemet. Ansvaret som i och med detta vilar på individen gör att beslut om framtida ekonomiska ersättningar måste fattas oavsett om kunskap och vilja föreligger eller ej. Då systemet kan uppfattas som omfattande och kunskaper om finansiella placeringar inte kan antas vara självklara för gemene man, kan det innebära stress och osäkerhet för spararen. En diskussion som uppmärksammats är huruvida pensionsspararna får kompensation i form av avkastning för avgifterna som fondbolagen tar ut i samband med förvalt-ning av fonderna. Förvalsalternativet, AP7 Aktiefond, placerar enligt ett världsmark-nadsindex och har i förhållande till de populäraste fonderna den lägsta avgiften. Inom premiepensionssystemet är fondavgifterna rabatterade vilken gör en betydlig skillnad på kostnaderna jämfört om spararen hade placerat i fonderna privat. Utifrån vad hypotesen om den effektiva marknaden föreskriver är det inte möjligt att överprestera marknadsindex under en längre tidsperiod vilket leder till antagandet att aktivt förvaltade fonder inte borde kunna generera högre avkastning än marknadsin-dex. Om hypotesen överensstämmer med hur marknaden ter sig i verkligheten före-ligger det inga incitament för sparare att betala högre avgifter för förvaltning av fon-der. Problemformuleringen för uppsatsen är formulerad enligt följande; - Har aktivt valda fonder, i jämförelse med det förvalda statliga alternativet AP7 Aktiefonden, presterat en avkastning där placeraren får kompensation för fondernas högre avgifter och det egna engagemanget som krävs? Syftet med uppsatsen är att försöka svara på om ett aktivt val är fördelaktigt, främst ur monetärt perspektiv men även med beaktning av människors underliggande in-ställning till komplexa frågor och kompetens att göra "rätt" val bland fonderna i premiepensionssystemet. Undersökningen bygger på insamlad data från de tio populäraste fonderna inom pre-miepensionsvalet där AP7 Aktiefond inkluderas. Fokus i uppsatsen ligger på att jäm-föra avkastning, riskjusterad avkastning och avgifter efter rabatt under 2003-2013 mellan utvalda fonder. Då uppsatsen har ett individperspektiv har en marknadsunder-sökning gällande individers ställningstagande inför fondplaceringar tolkats i syfte att utröna bakomliggande faktorer till den svenska befolkningens aktivitet respektive inaktivitet. Den teoretiska referensramen innefattar grundläggande begrepp samt teorier inom finansväsendet som kompletteras med vedertagna modeller för att möjliggöra jämfö-relser mellan finansiella placeringars utveckling. Studier gällande mänskliga bakom-liggande faktorer som påverkar vid komplexa val har inkluderats. Slutsatser som kan dras utifrån genomförd undersökning är att högre avgifter gene-rellt inte tenderar att ge högre avkastning. Dock anser vi att förvalsalternativet inte är det optimala valet, detta då rabatterna inom premiepensionen är så pass generösa att avgifterna hos aktivt valda fonder inte får samma genomslag som de hade fått utanför systemet. Förvalsalternativet kan ur viss aspekt visa sig som ett tillfredstäl-lande val eftersom premiepensionssystemet är komplext och omfattande vilket inne-bär att även om individen lägger ner möda för att hitta fördelaktiga placeringsalterna-tiv, ges inga garantier för framtida värdeutvecklingar.

The aim of this thesis has been to investigate the relationship between state and private pensions and personal savings. A theoretical framework has been developed to facilitate the a priori determination of the relationship and an empirical investigation then undertaken using data for the U.K. in the postwar period. These two aspects of the thesis will firstly be summarised. Initially, the standard life cycle model of individual accumulation is extended to include a flat rate pension scheme. The introduction of the scheme will have an impact on savings determined by a savings replacement effect, where pension saving is substituted for alternative forms personal saving, and an induced retirement effect, where savings is increased to finance a longer retirement period. The net effect on savings will depend on the rate of return to pension contributions, and therefore lifetime income, implied by the combination of the two effects. As membership of state pension schemes is usually compulsory there exists the possibility that the implied rate of return can be above or below the market rate, indeed it may even be negative, with the result that lifetime income may be higher or lower than prior to the introduction of the pension scheme. The impact on savings cannot therefore be determined at a theoretical level. Increasing pension contributions and benefits always lead to a reduction in work period and, under the usual assumptions, aggregate savings. These changes also induce early retirement. Having analysed the state pension case the model is further modified to include private pension schemes, in particular a terminal salary scheme, membership of which is assumed to be compulsory, and a money purchase scheme, the joining of which is a voluntary decision. Again, for the reasons outlined above, the effect on personal savings of introducing the private schemes cannot be determined a priori. It is still possible though to say something about the effect of changes in pension contributions and benefits. When considering the increasing of pension contributions and state pension benefits, the outcomes are as in the state pension case alone. If attention is confined to increasing private pension benefit functions by constant absolute amounts then early retirement and a reduction in work period savings are the unambiguous outcomes. In the case of the money purchase scheme early retirement also implies a larger private pension fund. The empirical estimation of the relationship has been attempted through the inclusion of pension wealth variables in the aggregate life cycle consumption function. Two definitions of pension wealth were used. Gross pension wealth has been defined as the discounted present value of future pension receipts weighted by survival probabilities whilst net pension wealth is gross pension wealth less the discounted present value of future pension contributions weighted by survival probabilities (termed liabilities). Unfortunately these definitions could only be used with state pensions - data was not available to evaluate these types of wealth variable in the case of private pensions. Over the period 1949-73 gross state pension wealth appears to have no impact on consumption, and therefore savings, whilst net pension wealth depresses consumption. The growth of the market value of the assets of superannuation- funds was used as a proxy for the growth of private pension wealth. This data was available for the period 1958-73. Whilst private pension wealth was found to be insignificant in the regressions in these same equations gross state pension wealth becomes significant and positive. If net pension wealth is substituted for the gross alternative its coefficient remains negative but its significance falls. Over both periods there was found to be no evidence of an induced retirement effect. Various estimates of the effect of the existence of pension schemes and changes in pension contributions and benefits were made on the basis of a range of estimated coefficients. As one would expect these estimates varied widely given the different signs of the coefficients on gross and net state pension wealth. There are four aspects of the work that, at the end of the day, give cause for concern. The two relating to the theoretical work are probably less serious than the two relating to the empirical work. In the development of the theoretical analysis the individuals work/leisure decision was given only passing consideration. Indeed it was only shown that if the individual moved continuously from the work to the retirement period then leisure considerations would be irrelevant. Nevertheless recognition was accorded to the possibility that if this move is discontinuous, which is highly likely to be the case, not only might the optimal retirement date be different to that derived in the basic model but also the earlier comparative statics results might no longer apply. In a recent paper Ulph (58) has begun to consider this problem in a model incorporating a terminal salary based private pension scheme. Employing an iso-elastic utility function in consumption and leisure he shows that certain assumptions relating to the parameters of the utility function imply that not all the comparative statics results of earlier chapters necessarily go through. Thus leisure considerations are not irrelevant to the analysis of pensions. The results also imply that analyses of the individuals life cycle problem which do not include pensions, and where the individual retires when the marginal utility of consumption falls below the marginal utility derived from spending all ones time in leisure, might be substantially changed when leisure considerations are taken into account. An obvious, extension of pension theory would then be to integrate it into a model of the above type, such as that of Blinder (13). Another important feature of the pension decision,, which again has only been covered rather briefly, is uncertainty about the length of lifetime. It has been shown that if it is assumed that there exists a perfect insurance market then the problem reduces to an analysis under certainty, the insurance asset obviating any problem arising from a probabilistic date of death. Ulph and Hemming (59) have since dropped this last assumption and shown how the results of this thesis are affected. Although this turns out to be to an extent: that gives little cause for concern, the new model does produce the results within a framework that is more realistic. The above paper also has important implications for another aspect of pension analysis. When lifetime is uncertain the purchase of a pension asset or annuity provides insurance and the individual should therefore be prepared to purchase it even if its return were less than actuarially fair. Now in evaluating the value of anticipated state pension wealth the average market rate of interest has been used to discount the expected value of future returns. This is an approximation of the actuarially fair rate of interest. But under uncertainty this is not the appropriate rate of discount - what ought to be used is the lowest rate of return at which the individual is just willing to purchase the annuity. In fact Ulph and Hemming show that whilst the individual is holding non-pension assets the appropriate rate of discount is the rate on those assets. Once the individual has run down his stock of these assets the appropriate rate of discount will be the subjective rate of discount incorporating a risk factor. Thus if the individual is holding the alternative asset the appropriate rate of discount is less than the actuarially fair rate, (see (3.6.4)). Pension wealth will therefore be underestimated. When none of the alternative assets are held the value of pension wealth can be under- or over-estimated depending on the relative magnitudes of the rates of interest and the subjective rate of discount.

Slightly revised version of his Dissertation, Universität Bremen, 2007--Vid. p. [vii]. / Includes bibliographical references.

Thesis (Ph. D.)--Georgia State University, 2007. / Title from file title page. James R. Alm, committee chair; Sally Wallace, Erdal Tekin, David P. Richardson, Jorge L. Martinez-Vazquez, committee members. Electronic text (144 p.) : digital, PDF file. Description based on contents viewed June 11, 2008. Includes bibliographical references (p. 137-143).

Diss. (Sammanfattning) Göteborg : Göteborgs universitet, 2008. / Härtill 4 uppsatser.

Thesis (Ph. D.)--Georgia State University, 2008. / Title from file title page. Sally Wallace, committee chair; Bruce A. Seaman, Klara S. Peter, Stephen J. Kay, committee members. Electronic text (116 p. : col. ill. ) : digital, PDF file. Description based on contents viewed Sept. 25, 2008. Includes bibliographical references (p. 112-115).

Inaug. _ Diss.: Philosophische Fakultät: Zürich: 1977. _ Bibliogr. p. 331-343.

Thesis (doctoral)--Göteborg University, 2008. / Added t.p. with thesis statement and abstract inserted. Includes bibliographical references.