Abstract
Diminutive investment performance is central to debates around the impact of privatisation. For some, the industry’s sub-optimal performance results from market inefficiencies, reflecting its emphasis on the cash nexus. However, these arguments have only limited relevance to the investment performance of pension fund managers whose activities are shaped by governmental action. This has included measures to induce uniform asset allocation such as quantitative limits on investment in designated financial securities or requirements to realise returns that exceed some minimum threshold. Market competition is further impaired by excluding plan participants from investment decision making. Not surprisingly, such arrangements have impacted adversely on the investment performance of pension fund managers. These issues are investigated empirically with reference to Chile and the salient characteristics of compulsory fully funded pension arrangements elsewhere.
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Hyde, M., Borzutzky, S. (2016). Performance: Investment Regulation and Returns in Mandatory DC Pensions. In: Rent-Seeking in Private Pensions. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-58035-1_4
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DOI: https://doi.org/10.1057/978-1-137-58035-1_4
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