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Summary This study investigates the relationship between governance, investment performance and asset allocation of pension funds in Switzerland. Our sample includes survey data from 139 Swiss occupational pension plans for which we develop a governance metric comprising attributes of organisational design, management incentives, target setting, investment strategy, investment processes, risk management, monitoring, and transparency. We find empirical evidence that pension fund governance is positively related to excess returns, benchmark outperformance and Sharpe ratios. Pension funds in the top governance quartile outperform those in the bottom quartile by approximately 1% in terms of average excess returns and benchmark deviation. Furthermore, our study results indicate that asset allocation decisions are not related to governance, but rather to institutional factors.

Restricted public pension schemes and cuts in earnings-related pensions have increased the role of pension funds. However, it is unclear from previous studies how far financial market crises affect pension funds mediated by trade unions and employee participation. This article draws on institutionalist arguments to link different mechanisms of coordination of market economies to differences in pension systems, corporate and pension fund governance, investment strategies and thus the vulnerability of pension funds to financial market risks. There is higher vulnerability to financial market crises in liberal market economies with weak trade union influence and high equity exposure. [ABSTRACT FROM PUBLISHER]

In pension sector, many regulations aimed at maximizing the interests of pension plans members and their beneficiaries, were introduced. Despite this, pension institutions are faced with the same governance problems as modern corporations. The basic problems arise from delegation of decision making powers and creation of agency relationships. The primary objective of pension fund governance is to minimize the potential agency problems or conflicts of interest arising between the pension fund stakeholders and its managing body. Problems, that may affect the safety of retirement savings and pension liabilities. This article attempts to identify the problems faced by governance in voluntary pension funds managed by general pension societies in Poland. [ABSTRACT FROM AUTHOR]

This paper investigates the determinants of the operational and financial efficiency of pension funds in Kenya. A sample of 362 pension schemes was drawn from the Kenyan Retirement Benefits Authority (RBA) register. The empirical results show that pension governance, leadership and regulations do not significantly influence the operational and financial efficiency of pension funds. The results do however reveal that pension regulations influence the leadership and governance practices of the pension schemes. Moreover, the schemes with more middle-aged members (31-40 years) are perceived to be better governed. Lastly, the results reveal fund size to be an important determinant of the financial efficiency of the pension funds. [ABSTRACT FROM AUTHOR]

This article presents a framework intended to provide pension funds with practical guidance for the successful implementation of a sustainable investing strategy. The framework is developed with respect to the UK and US pension funds (as these share certain common legal characteristics) and focuses on the changes that pension funds adopting such a strategy should make to their investment strategies and governance (particularly through the formulation and articulation of clear investment mission and strong investment beliefs). The article proceeds with a review of socially responsible investment (SRI) and more recent responsible investment (RI) literature, in the context of growing public awareness (but not necessarily understanding) of the concept of sustainability ('Literature review of SRI field: SRI, RI and sustainable investing' section). It then examines the literature on pension fund governance, arguing the need for more detailed practical guidance for funds moving towards sustainable investing, especially for those implementing a sustainable investing strategy ('Anglo-American pension fund governance' section). It presents the framework for the practical implementation of sustainable investing in the 'Sustainable investing framework' section. Finally, we review the relevant Anglo-American legal backdrop, outlining how pension funds adopting our framework should approach their fiduciary obligations, and then discussing potential regulatory enablers of sustainable investment ('Legal context: barriers to and enablers of sustainable investing' section). [ABSTRACT FROM AUTHOR]

The global financial crisis has posed profound threats to pension welfare worldwide. This is particularly so in the United Kingdom with the closure of private defined benefit plans, and the heavy losses experienced by many defined contribution pension plan participants. Meeting these challenges has placed a premium on plan governance, given its link to fund performance. This paper begins by considering the academic literature on institutional change, including an analysis of the most common ways of responding to a changing environment. It is noted that the nature and scope of institutional response to a changing environment depends, in part, upon funds’ governance budgets, including time, expertise and common commitment. Our research on UK governance suggests that incremental adaptation has been the operative strategy augmented, in some cases, by the adoption of UK corporate governance practices. Three types of innovation in the governance of UK pension plans are identified: the transformation of decision-making, the pension buy-out and fiduciary management alongwith an emerging ‘new’ model of pension fund governance. In the penultimate section of this paper, lessons from UK best practice are drawn for institutions that face unprecedented challenges in realising the pension promise. Thereafter, we suggest a possible approach for regulators to strengthen the pension fund sector, based on improved disclosure, independent board chairs and the skills of board members. [ABSTRACT FROM AUTHOR]