Pension regulation

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Pension regulation is a legal term encompassing, the set of laws, rules and authoritative standards governing the pension industry, and the procedures needed to enforce them.

Contents

Pension regulation varies widely from one jurisdiction to another - notably due to the persistence of discrepancies in the degree of autonomy and breadth of authority and discretionary power that national and regional pension regulators have at their disposal to enforce efficiently existing laws and regulations, in relation with local judicial practices and varying jurisprudential trends. [1]

Pension regulation seeks to provide the various norms and standards needed to foster market efficiency, consistency, transparency and accountability across the pension industry; it is a key driver of pension funds' risk management.

In Europe, after the 2008 financial crisis, some pension experts such as Anton van Nunen argued that excessive or misplaced regulatory activism can sometimes have negative unintended consequences, [2] notably when it comes to the strict enforcement of asset liability matching in times high market volatility and the systematic use of bonds-based risk metrics across all asset classes.

Kinds of pensions

Voluntary or mandatory

Universal or Means tested

PAYG or funded

Defined benefit (DB) or defined contribution (DC)

This characteristic defines a party bearing a risk.

References

  1. (in English) Blake, Cassels & Graydon Business Bulletin, 'Pension Regulation and Court Trends in British Columbia', archived from the original on 2011-09-27, retrieved 2005-09-01
  2. (in English) see Rachel Pichardo-Allison, "Van Nunen: Dutch regulations "killing" pensions", 15 Dec 2010 , retrieved 2011-03-20
  3. Forman, Mackenzie (November 21, 2013). "The Cost of 'Choice' in a Voluntary Pension System". New York University Review of Employee Benefits and Executive Compensation.
  4. Kumru, Piggott (February 13, 2010). "Should Public Retirement Pensions Be Means-tested?". DEGIT Conference Papers via Google scholar.
  5. Palacios, Rober; Whitehouse, Edward (January 1998). The Role of Choice in the Transition to a Funded Pension System (Report). Social Protection Discussion Paper Series No. 9812. The World Bank. p. 1.
  6. "Defined-Benefit Pension Plan vs. Defined-Contribution Plan: An Overview". March 23, 2020.