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OECD Pension Fund Portfolio Allocation
www.kapital-plus.netmr.sc. Tomislav Petrov
Introduction
• There is a growing need among regulatory and policy community to compare program developments and experiences to those of other countries. The availability of an comparable and up-to-date body of international statistics is a necessary tool for policy-makers, regulators and market participants, so we make OECD indicators user-friendly for the public.
Supervision of pension funds in Croatia
• One mission of HANFA is the protection of the pension fund members interests. Their assets must be adequately safeguarded from undue loss.
• In Croatia, as in Mexico, Poland and Slovak Republic, funded pension plans are distributed to retail investors without the intermediation of employers.
Types of pension plans: defined benefit and defined contribution
• Defined contribution plan: – Employee and/or employer contributions are based on percent
of salary into individual account. The pension is a function of the contributions that have been made.
– Employee bears the risk if investment returns are insufficient. The cost to the employer is fixed.
• Defined benefit plan:– Benefits are usually based on years of service and salary level.– Sponsor or sponsor and beneficiaries bear investment risk. The
employer retains a risk that they will not be enough to pay the pensions.
– Measurement of assets and liabilities determine contribution and benefit rates.
The on-going shift from defined benefit to defined contribution
• The shift from defined benefit to defined contribution pension plans is a phenomenon spread throughout most of the OECD countries. Defined benefit is complex and not attractive.
• The pension fund in the Czech Republic, Hungary, Italy, Poland, Portugal, the Slovak Republic and Spain are all largely or solely supporting defined contribution arrangements.
• When comparing the data it is therefore important that users be aware of the institutional differences between countries.
Structure of assets of pension funds
• Cash and Deposits• Bills and Bonds issued by public administration• Corporate Bonds• Loans• Shares• Land and Buildings• Mutual Funds (CIS)• Unallocated insurance contracts• Other investments
Structure of assets varies across countries
• Cash and Deposits account for more then 40% of the total assets in Indonesia, Brazil and Thailand, and 15.3% in Slovenia.
• Bills and Bonds issued by public administration account for over one half of total investments in Singapore, Mexico, Turkey, Hungary, France, Poland, Czech Republic and Bulgaria.
• Corporate bonds account for over 30% of the total assets in Korea, Spain, Slovenia, Netherlands, Norway and Germany.
Structure of assets varies across countries
• Loans account for over 25% of the total assets in Germany.
• Shares account for over 30% of the total assets in Netherlands, United States, Finland, United Kingdom, Estonia, Austria, Germany, Iceland and Poland.
• Real estate account almost 10% of the total assets in Switzerland, Portugal, Italy and Finland.
• Mutual funds account for over 65% of the total assets in Belgium and Australia, and over 30% of the total assets in Canada, Switzerland, France and United States.
Asset allocation trends
• A move towards greater international diversification of pension fund portfolios (over 50%) and strategic shift towards a greater share of high-quality long-term bonds (demographic developments have downward pressure on long-term interest rates with maturity of ten years or longer) was observed.
• Growing allocations into bonds in countries with high equity investment, into shares in countries with high investments into fixed income securities and general shift towards alternative investments was observed.
Australia
Assets of pension funds in 2005 in Australia
Cash and Deposits 2.3 %
Loans 7%
Shares 21.7 %
Mutual Funds 65.9 %
Other 3.1 %
Austria
Assets of pension funds in 2002 in Austria
Cash and Deposits 2%
Bills and bonds 74.5 %
Shares 13.4 %
Other 10.1 %
Assets of pension funds in 2003 in Austria
Cash and Deposits 2.3 %
Bills and bonds 73.6 %
Shares 16.5 %
Other 7.8 %
Austria
Assets of pension funds in 2004 in Austria
Cash and Deposits 1.2 %
Bills and bonds 71.6 %
Shares 19.4 %
Other 7.8 %
Assets of pension funds in 2003 in Austria
Cash and Deposits 2.3 %
Bills and bonds 73.6 %
Shares 16.5 %
Other 7.8 %
Austria
Assets of pension funds in 2004 in Austria
Cash and Deposits 1.2 %
Bills and bonds 71.6 %
Shares 19.4 %
Other 7.8 %
Assets of pension funds in 2005 in Austria
Cash and Deposits 3.6 %
Bills and bonds 40.7 %
Corporate bonds 13.8 %
Shares 36.5 %
Other 5.4 %
Belgium
Assets of pension funds in 2002 in Belgium
Cash and Deposits 4.4 %
Bills and bonds 13.6 %
Shares 14.6 %
Mutual funds 55.8 %
Other 11.6 %
Assets of pension funds in 2004 in Belgium
Cash and Deposits 3.3 %Bills and bonds 2.7 %
Shares 9.4 %
Mutual funds 75.2 %
Other 9.4 %
Belgium
Assets of pension funds in 2004 in Belgium
Cash and Deposits 3.3 %Bills and bonds 2.7 %
Shares 9.4 %
Mutual funds 75.2 %
Other 9.4 %
Assets of pension funds in 2005 in Belgium
Cash and Deposits 2.5 %
Bills and bonds 4%
Shares 9.8 %
Mutual funds 74.9 % Other 8.8 %
Brazil
Assets of pension funds in 2002 in Brazil
Cash and Deposits 44.2 %
Bills and bonds 14.9 %
Shares 15.9 %Mutual funds 11.6 %
Other 13.4 %
Assets of pension funds in 2005 in Brazil
Cash and Deposits 44.2 %
Bills and bonds 17.1 %
Shares 15.9 %Mutual funds 11.6 %
Other 11.2 %
Bulgaria
Assets of pension funds in 2002 in Bulgaria
Cash and Deposits 27.8 %
Bills and bonds 62.2 %Corporate bonds 7%
Other 3%
Assets of pension funds in 2003 in Bulgaria
Cash and Deposits 19.9 %
Bills and bonds 62.5 %
Corporate bonds 11.5 %
Other 6.1 %
Bulgaria
Assets of pension funds in 2004 in Bulgaria
Cash and Deposits 19.9 %
Bills and bonds 55.2 %
Corporate bonds 18.6 %
Other 6.3 %
Assets of pension funds in 2003 in Bulgaria
Cash and Deposits 19.9 %
Bills and bonds 62.5 %
Corporate bonds 11.5 %
Other 6.1 %
Bulgaria
Assets of pension funds in 2004 in Bulgaria
Cash and Deposits 19.9 %
Bills and bonds 55.2 %
Corporate bonds 18.6 %
Other 6.3 %
Assets of pension funds in 2005 in Bulgaria
Cash and Deposits 19.2 %
Bills and bonds 50.1 %
Corporate bonds 19%
Shares 6.4 %
Other 5.3 %
Canada
Assets of pension funds in 2002 in Canada
Cash and Deposits 4.9 %
Bills and bonds 26.6 %
Shares 28.7 %
Mutual funds 32.8 %
Other 7%
Assets of pension funds in 2003 in Canada
Cash and Deposits 5%
Bills and bonds 18.7 %Shares 23.6 %
Mutual funds 36.7 %
Other 16%
Canada
Assets of pension funds in 2005 in Canada
Cash and Deposits 4.3 %
Bills and bonds 17.8 %Shares 25.8 %
Mutual funds 39.8 %
Other 12.3 %
Czech Republic
Assets of pension funds in 2002 in Czech R.
Cash and Deposits 14.8 %Bills and bonds 49.9 %
Shares 6.2 %Other 29.1 %
Assets of pension funds in 2003 in Czech R.
Cash and Deposits 7.9 %
Bills and bonds 60.1 %
Shares 4.9 %Corporate bonds 24.8 %
Other 2.3 %
Czech Republic
Assets of pension funds in 2004 in Czech R.
Cash and Deposits 9.6 %
Bills and bonds 51.9 %
Shares 5.5 %Corporate bonds 31.1 %
Other 1.9 %
Assets of pension funds in 2003 in Czech R.
Cash and Deposits 7.9 %
Bills and bonds 60.1 %
Shares 4.9 %Corporate bonds 24.8 %
Other 2.3 %
Czech Republic
Assets of pension funds in 2004 in Czech R.
Cash and Deposits 9.6 %
Bills and bonds 51.9 %
Shares 5.5 %Corporate bonds 31.1 %
Other 1.9 %
Assets of pension funds in 2005 in Czech R.
Bills and bonds 60.3 %
Corporate bonds 22.1 %
Other 17.6 %
Denmark
Assets of pension funds in 2002 in Denmark
Cash and Deposits 0.4 %
Bills and bonds 26.8 %
Corporate bonds 40%
Shares 20%
Mutual funds 6.6 %
Other 6.2 %
Assets of pension funds in 2003 in Denmark
Cash and Deposits 0.3 %
Bills and bonds 25.6 %
Corporate bonds 39.9 %
Shares 21.1 %
Mutual funds 7.8 %
Other 5.3 %
Denmark
Assets of pension funds in 2004 in Denmark
Cash and Deposits 0.3 %
Bills and bonds 24.7 %Corporate bonds 29%
Shares 19.8 %Mutual funds 16.9 %
Other 9.3 %
Assets of pension funds in 2003 in Denmark
Cash and Deposits 0.3 %
Bills and bonds 25.6 %
Corporate bonds 39.9 %
Shares 21.1 %
Mutual funds 7.8 %
Other 5.3 %
Denmark
Assets of pension funds in 2004 in Denmark
Cash and Deposits 0.3 %
Bills and bonds 24.7 %Corporate bonds 29%
Shares 19.8 %Mutual funds 16.9 %
Other 9.3 %
Assets of pension funds in 2005 in Denmark
Cash and Deposits 0.7 %
Bills and bonds 26.6 %Corporate bonds 23.7 %
Shares 25.9 %Mutual funds 11.2 %
Other 11.9 %
Estonia
Assets of pension funds in 2002 in Estonia
Cash and Deposits 14.9 %
Bills and bonds 34%
Corporate bonds 26.1 %
Shares 11.4 %
Mutual funds 13.5 %
Other 0.1 %
Assets of pension funds in 2003 in Estonia
Cash and Deposits 8.2 %
Bills and bonds 32.6 %
Corporate bonds 23.3 %
Shares 33.5 %
Mutual funds 1.8 %Other 0.6 %
Estonia
Assets of pension funds in 2004 in Estonia
Cash and Deposits 4.4 %
Bills and bonds 33.9 %
Corporate bonds 23.3 %
Shares 35.1 %
Mutual funds 6.2 %
Other 1.8 %
Assets of pension funds in 2003 in Estonia
Cash and Deposits 8.2 %
Bills and bonds 32.6 %
Corporate bonds 23.3 %
Shares 33.5 %
Mutual funds 1.8 %Other 0.6 %
Estonia
Assets of pension funds in 2004 in Estonia
Cash and Deposits 4.4 %
Bills and bonds 33.9 %
Corporate bonds 23.3 %
Shares 35.1 %
Mutual funds 6.2 %
Other 1.8 %
Assets of pension funds in 2005 in Estonia
Cash and Deposits 5.2 %
Bills and bonds 24.8 %
Corporate bonds 20.6 %
Shares 38.7 %
Mutual funds 8.9 %
Other 1.8 %
Finland
Assets of pension funds in 2004 in Finland
Cash and Deposits 0.9 %
Bills and bonds 50.1 %
Shares 30.4 %Land and Buildings 9.6 %
Other 9%
Assets of pension funds in 2001 in Finland
Cash and Deposits 0.2 %
Bills and bonds 33.3 %
Shares 27%
Land and Buildings 15.4 %
Other 24.1 %
Finland
Assets of pension funds in 2004 in Finland
Cash and Deposits 0.9 %
Bills and bonds 50.1 %
Shares 30.4 %Land and Buildings 9.6 %
Other 9%
Assets of pension funds in 2005 in Finland
Bills and bonds 45.7 %
Shares 41.3 %
Land and Buildings 7.7 %
Other 5.3 %
Germany
Assets of pension funds in 2002 in Germany
Cash and Deposits 2.3 %
Bills and bonds 41.4 %
Loans 25.6 %
Shares 15.8 %
Other 14.9 %
Assets of pension funds in 2003 in Germany
Cash and Deposits 2.6 %
Bills and bonds 36.3 %
Loans 27%
Shares 12.7 %
Other 21.4 %
Germany
Assets of pension funds in 2004 in Germany
Cash and Deposits 2.6 %
Corporate bonds 26.6 %
Loans 28.1 %
Shares 32.2 %
Other 10.5 %
Assets of pension funds in 2003 in Germany
Cash and Deposits 2.6 %
Bills and bonds 36.3 %
Loans 27%
Shares 12.7 %
Other 21.4 %
Germany
Assets of pension funds in 2004 in Germany
Cash and Deposits 2.6 %
Corporate bonds 26.6 %
Loans 28.1 %
Shares 32.2 %
Other 10.5 %
Assets of pension funds in 2005 in Germany
Cash and Deposits 3.3 %
Corporate bonds 29.4 %
Loans 27.3 %
Shares 34.5 %
Other 5.5 %
Hungary
Assets of pension funds in 2002 in Hungary
Cash and Deposits 4.4 %
Bills and bonds 68.1 %
Shares 8.7 %Mutual funds 5.8 %
Other 13%
Assets of pension funds in 2004 in Hungary
Cash and Deposits 1.3 %
Bills and bonds 74.9 %
Shares 5.2 %Mutual funds 7.5 %
Other 11.1 %
Hungary
Assets of pension funds in 2004 in Hungary
Cash and Deposits 1.3 %
Bills and bonds 74.9 %
Shares 5.2 %Mutual funds 7.5 %
Other 11.1 %
Assets of pension funds in 2005 in Hungary
Cash and Deposits 1.4 %
Bills and bonds 74.1 %
Shares 7.8 %
Mutual funds 9.0 %
Other 7.7 %
Iceland
Assets of pension funds in 2002 in Iceland
Cash and Deposits 2.2 %
Bills and bonds 39.6 %
Corporate bonds 15.9 %
Loans 14.8 % Shares 25.8 %
Other 1.7 %
Assets of pension funds in 2003 in Iceland
Cash and Deposits 2.5 %
Bills and bonds 35.4 %
Corporate bonds 14.9 %
Loans 12.8 %
Shares 30.4 %
Other 4%
Iceland
Assets of pension funds in 2004 in Iceland
Cash and Deposits 2.4 %
Bills and bonds 33%
Corporate bonds 15.3 %
Loans 10.4 %
Shares 33.7 %
Other 5.2 %
Assets of pension funds in 2003 in Iceland
Cash and Deposits 2.5 %
Bills and bonds 35.4 %
Corporate bonds 14.9 %
Loans 12.8 %
Shares 30.4 %
Other 4%
Iceland
Assets of pension funds in 2004 in Iceland
Cash and Deposits 2.4 %
Bills and bonds 33%
Corporate bonds 15.3 %
Loans 10.4 %
Shares 33.7 %
Other 5.2 %
Assets of pension funds in 2005 in Iceland
Cash and Deposits 1.7 %
Bills and bonds 26.9 %
Corporate bonds 23%
Loans 8.7 %
Shares 34.5 %
Other 5.2 %
Italy
Assets of pension funds in 2002 in Italy
Cash and Deposits 9.1 %
Bills and bonds 33%
Shares 5.8 %
Land and Build 16.4 %
Mutual Funds 4.3 %Insurance contracts 15%
Other 16.4 %
Assets of pension funds in 2003 in Italy
Cash and Deposits 9.1 %
Bills and bonds 33%
Shares 5.8 %
Land and Build 11%
Mutual Funds 4.3 %
Insurance contracts 20.4 %
Other 16.4 %
Italy
Assets of pension funds in 2004 in Italy
Cash and Deposits 5.9 %
Bills and bonds 34.8 %
Shares 8.4 %
Land and Build 9.2 %
Mutual Funds 10.3 %Insurance contracts 24.5 %
Other 6.9 %
Assets of pension funds in 2003 in Italy
Cash and Deposits 9.1 %
Bills and bonds 33%
Shares 5.8 %
Land and Build 11%
Mutual Funds 4.3 %
Insurance contracts 20.4 %
Other 16.4 %
Italy
Assets of pension funds in 2004 in Italy
Cash and Deposits 5.9 %
Bills and bonds 34.8 %
Shares 8.4 %
Land and Build 9.2 %
Mutual Funds 10.3 %Insurance contracts 24.5 %
Other 6.9 %
Assets of pension funds in 2005 in Italy
Cash and Deposits 4.7 %
Bills and bonds 28.9 %
Shares 9.9 %
Land and Build 7.8 %
Mutual Funds 11.3 %
Insurance contracts 23.9 %
Other 13.5 %
Korea
Assets of pension funds in 2002 in Korea
Cash and Deposits 1.3 %
Bills and bonds 6%
Corporate bonds 39.3 %
Loans 5%
Other 48.4 %
Assets of pension funds in 2003 in Korea
Cash and Deposits 4.4 %
Bills and bonds 34.6 %
Corporate bonds 30.6 %
Loans 13.3 %
Other 17.1 %
Korea
Assets of pension funds in 2004 in Korea
Cash and Deposits 7.4 %
Bills and bonds 24.3 %
Corporate bonds 56.4 %Loans 9.9 %
Other 2%
Assets of pension funds in 2003 in Korea
Cash and Deposits 4.4 %
Bills and bonds 34.6 %
Corporate bonds 30.6 %
Loans 13.3 %
Other 17.1 %
Korea
Assets of pension funds in 2004 in Korea
Cash and Deposits 7.4 %
Bills and bonds 24.3 %
Corporate bonds 56.4 %Loans 9.9 %
Other 2%
Assets of pension funds in 2005 in Korea
Cash and Deposits 8%
Bills and bonds 28%
Corporate bonds 50.9 %
Loans 10.9 %
Other 2.2 %
Mexico
Assets of pension funds in 2002 in Mexico
Cash and Deposits 0.2 %
Bills and bonds 85.4 %
Corporate bonds 14.4 %
Assets of pension funds in 2004 in Mexico
Bills and bonds 85.2 %
Corporate bonds 11.7 %
Other 3.1 %
Mexico
Assets of pension funds in 2004 in Mexico
Bills and bonds 85.2 %
Corporate bonds 11.7 %
Other 3.1 %
Assets of pension funds in 2005 in Mexico
Bills and bonds 83.8 %
Corporate bonds 11%
Other 5.2 %
Netherlands
Assets of pension funds in 2002 in Netherlands
Cash and Deposits 3%
Corporate bonds 44%
Shares 37%Loans 8.1 %
Other 7.9 %
Assets of pension funds in 2003 in Netherlands
Cash and Deposits 2%
Corporate bonds 13.8 %Shares 44.6 %
Bills and bonds 25.5 %
Other 14.1 %
Netherlands
Assets of pension funds in 2005 in Netherlands
Cash and Deposits 2.5 %
Corporate bonds 35%
Shares 49.8 %
Other 12.7 %
Norway
Assets of pension funds in 2002 in Norway
Cash and Deposits 4.6 %
Bills and bonds 28.8 %
Corporate bonds 33.8 %
Shares 19.2 %
Other 13.6 %
Assets of pension funds in 2004 in Norway
Cash and Deposits 4.7 %
Bills and bonds 27.6 %
Corporate bonds 32.5 %
Shares 24.8 %
Other 10.4 %
Norway
Assets of pension funds in 2004 in Norway
Cash and Deposits 4.7 %
Bills and bonds 27.6 %
Corporate bonds 32.5 %
Shares 24.8 %
Other 10.4 %
Assets of pension funds in 2005 in Norway
Cash and Deposits 4.9 %
Bills and bonds 22.5 %
Corporate bonds 32.9 %
Shares 28.9 %
Other 10.8 %
Poland
Assets of pension funds in 2002 in Poland
Cash and Deposits 4.2 %
Bills and bonds 66.8 %
Shares 27.8 %
Other 1.2 %
Assets of pension funds in 2003 in Poland
Cash and Deposits 4.8 %
Bills and bonds 61%
Shares 32.1 %
Other 2.1 %
Poland
Assets of pension funds in 2004 in Poland
Cash and Deposits 5.8 %
Bills and bonds 58.9 %
Shares 33.4 %
Other 1.9 %
Assets of pension funds in 2003 in Poland
Cash and Deposits 4.8 %
Bills and bonds 61%
Shares 32.1 %
Other 2.1 %
Poland
Assets of pension funds in 2004 in Poland
Cash and Deposits 5.8 %
Bills and bonds 58.9 %
Shares 33.4 %
Other 1.9 %
Assets of pension funds in 2005 in Poland
Cash and Deposits 4.1 %
Bills and bonds 62.3 %
Shares 32%
Other 1.6 %
Portugal
Assets of pension funds in 2002 in Portugal
Cash and Deposits 12%
Bills and bonds 25.2 %
Corporate bonds 23.5 %
Shares 16.7 %Mutual funds 11.8 %
Other 10.8 %
Assets of pension funds in 2003 in Portugal
Cash and Deposits 9%
Bills and bonds 21.4 %
Corporate bonds 21.6 %
Shares 19.3 %Mutual funds 16.5 %
Other 12.2 %
Portugal
Assets of pension funds in 2004 in Portugal
Cash and Deposits 8.2 %
Bills and bonds 24.4 %
Corporate bonds 18.4 %
Shares 22.1 %Mutual funds 22.4 %
Other 4.5 %
Assets of pension funds in 2003 in Portugal
Cash and Deposits 9%
Bills and bonds 21.4 %
Corporate bonds 21.6 %
Shares 19.3 %Mutual funds 16.5 %
Other 12.2 %
Portugal
Assets of pension funds in 2004 in Portugal
Cash and Deposits 8.2 %
Bills and bonds 24.4 %
Corporate bonds 18.4 %
Shares 22.1 %Mutual funds 22.4 %
Other 4.5 %
Assets of pension funds in 2005 in Portugal
Cash and Deposits 10%
Bills and bonds 23.7 %
Corporate bonds 15%
Shares 22.1 %
Land and Build 8.1 %
Mutual funds 22.1 %
Slovak Republic
Assets of pension funds in 2002 in Slovak R.
Cash and Deposits 34.6 %
Bills and bonds 40%
Corporate bonds 11.3 %
Other 14.1 %
Slovenia
Assets of pension funds in 2002 in Slovenia
Cash and Deposits 21.9 %
Bills and bonds 54.7 %
Corporate bonds 19.5 %
Other 3.9 %
Assets of pension funds in 2004 in Slovenia
Cash and Deposits 13.3 %
Bills and bonds 46.3 %
Corporate bonds 32.4 %
Other 8%
Slovenia
Assets of pension funds in 2004 in Slovenia
Cash and Deposits 13.3 %
Bills and bonds 46.3 %
Corporate bonds 32.4 %
Other 8%
Assets of pension funds in 2005 in Slovenia
Cash and Deposits 15.3 %
Bills and bonds 41%
Corporate bonds 35.7 %
Other 8%
Spain
Assets of pension funds in 2001 in Spain
Cash and Deposits 4.7 %
Bills and bonds 37.2 %
Corporate bonds 20.9 %
Shares 19.6 %
Other 17.6 %
Assets of pension funds in 2003 in Spain
Cash and Deposits 4.2 %
Bills and bonds 20%
Corporate bonds 35%
Shares 15.9 %
Other 24.9 %
Spain
Assets of pension funds in 2004 in Spain
Cash and Deposits 4.9 %
Bills and bonds 20.3 %
Corporate bonds 36.4 %
Shares 17.5 %
Other 20.9 %
Assets of pension funds in 2003 in Spain
Cash and Deposits 4.2 %
Bills and bonds 20%
Corporate bonds 35%
Shares 15.9 %
Other 24.9 %
Spain
Assets of pension funds in 2004 in Spain
Cash and Deposits 4.9 %
Bills and bonds 20.3 %
Corporate bonds 36.4 %
Shares 17.5 %
Other 20.9 %
Assets of pension funds in 2005 in Spain
Cash and Deposits 7.3 %
Bills and bonds 18.2 %
Corporate bonds 42%
Shares 15.2 %
Mutual funds 9%
Other 8.3 %
Switzerland
Assets of pension funds in 2000 in Switzerland
Cash and Deposits 7.1 %
Bills and bonds 26.8 %
Shares 26.5 %
Lands and Build 10.5 %Mutual funds 15.2 %
Other 13.9 %
Assets of pension funds in 2002 in Switzerland
Cash and Deposits 9.9 %
Bills and bonds 29.3 %
Shares 19.1 %
Lands and Build 12.3 %Mutual funds 17.5 %
Other 11.9 %
Switzerland
Assets of pension funds in 2005 in Switzerland
Cash and Deposits 7.9 %
Bills and bonds 25.6 %
Shares 16.9 %
Lands and Build 9.6 %
Mutual funds 30.2 %
Other 9.8 %
Turkey
Assets of pension funds in 2004 in Turkey
Bills and bonds 72.6 %
Shares 13.2 %
Other 14.2 %
Assets of pension funds in 2005 in Turkey
Bills and bonds 80.5 %
Shares 11.6 %
Other 7.9 %
United Kingdom
Assets of pension funds in 2001 in UK
Cash and Deposits 2.6 %
Bills and bonds 14.5 %
Shares 53.8 %
Mutual funds 11.4 %
Other 17.7 %
Assets of pension funds in 2003 in UK
Cash and Deposits 2.5 %
Bills and bonds 14.7 %Shares 43.4 %
Mutual funds 15.4 %
Other 24. %
United Kingdom
Assets of pension funds in 2003 in UK
Cash and Deposits 2.5 %
Bills and bonds 14.7 %Shares 43.4 %
Mutual funds 15.4 %
Other 24. %
Assets of pension funds in 2005 in UK
Cash and Deposits 2.2 %
Bills and bonds 12.9 %
Corporate bonds 7.3 %
Shares 40.1 %
Mutual funds 18%Insurance 8.5 %
Other 11%
United States
Assets of pension funds in 2002 in US
Cash and Deposits 10.6 %
Shares 33.1 %
Mutual funds 24.1 %
Insurance contracts 11.2 %
Other 21%
Assets of pension funds in 2003 in US
Cash and Deposits 7.1 %
Shares 29.3 %
Mutual funds 21.3 %
Insurance contracts 8.7 %Other 33.6 %
United States
Assets of pension funds in 2004 in US
Cash and Deposits 8.3 %
Shares 35.5 %
Mutual funds 30.7 %
Insurance contracts 9.4 %
Other 16.1 %
Assets of pension funds in 2003 in US
Cash and Deposits 7.1 %
Shares 29.3 %
Mutual funds 21.3 %
Insurance contracts 8.7 %Other 33.6 %
United States
Assets of pension funds in 2004 in US
Cash and Deposits 8.3 %
Shares 35.5 %
Mutual funds 30.7 %
Insurance contracts 9.4 %
Other 16.1 %
Assets of pension funds in 2005 in US
Cash and Deposits 4.8 %
Bills and bonds 8.8 %
Corporate bonds 5.9 %
Shares 41.3 %
Mutual funds 23.5 %
Insurance contracts 5.2 %
Other 10.5 %
Return on pension fund assets
Country 2003 2004
Australia 11.9% 11.3%
Belgium 8.6% 8.9%
Bulgaria 11.4% 11.4%
Hungary 3.3% 16.5%
Mexico 10.4% 6.7%
Guard against insolvency
• Pension Protection Fund is introduced to charge a risk-based levy to pension funds in United Kingdom.
• Pension Benefit Guarantee Corporation responsibilities are similar in United States.
Guard against insolvency
• Additional protection measures for pension benefits are insolvency guarantee schemes and priority creditor rights.
• Pension benefit guarantee schemes are insurance type arrangements, with premiums paid by pension funds, which takes on outstanding pension obligations which cannot be met by the insolvent plan sponsor.
• Priority creditor rights should be given to unpaid and due contributions and care should be taken that pension beneficiaries be treated at least as well as other creditors in any bankruptcy or restructuring process (e.g. ensuring their representation on creditor committees).
Pension funds total investments as a share of GDP and as a share
of market capitalization
www.kapital-plus.netmr.sc. Tomislav Petrov
Total investments of pension funds (as a percent of GDP)
OECD Countries 2001 2002 2003 2004Australia 57.7 58.1 56.1 72.7
Canada (1) 53.3 47.8 52.1 52.1
Denmark 27.2 25.6 27.6 30.0
Iceland 86.4 87.6 101.9 111.9
Ireland (4) 44.3 35.1 39.4 42.6
Japan (5) 13.9 14.1 15.3 14.2
Netherlands (1) 107.0 89.4 106.2 106.2
Switzerland (1) (8) 104.4 96.7 111.6 111.6
United Kingdom (1) (9) 72.5 72.5 65.1 65.1
United States (10) 93.9 82.0 92.0 95.0
Total investments of pension funds (as a percent of GDP)
OECD Countries 2001 2002 2003 2004Austria 3.9 3.9 4.2 4.5
Czech Republic 2.3 2.8 3.1 3.6
Germany 3.3 3.4 3.6 3.8
Hungary 4.0 4.6 5.4 6.8
Italy 2.3 2.4 2.5 2.6
Mexico 4.3 5.2 5.8 6.3
Poland 2.5 4.0 5.5 7.0
Slovak Republic (1) 10.7 16.6 22.7 22.7
Spain (6) 5.8 5.7 6.2 9.0
Pension fund assets growth
• Countries that have started from a relatively small base are experiencing fast growth in pension fund assets.
Pension fund cash flow
• Pension fund cash flow is the difference between revenues and expenditures.
• Revenue is a primarily composed of contributions, profits on the sale of investments and dividends and interest.
• Expenditures consist of pension payments and losses on the sale of investments.
• Cash flow = [Total contributions + Net investments income + Other income] - [Benefits + Operational expenses + Other expenses]
OECD contacts
• [email protected], the Global Pension Statistics Project manager in the Financial Affairs Division
• www.iopsweb.org, the International Organization of Pension Supervisors (IOPS) have projects in risk-based supervision, education and training.
• OECD-IOPS Global Forum on Private Pensions, Istanbul, Turkey, Dec. 2006
