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Aging, Asset Allocation, and Costs: Evidence for the Pension Fund Industry in Switzerland
Author:
Mr. Rene Weber
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and
David S. Gerber null

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Series:
IMF Working Papers
Volume/Issue:
Volume 2007: Issue 029
Language:
English
Publication Date:
01 Feb 2007
DOI:
https://doi.org/10.5089/9781451865936.001
ISBN:
9781451865936
ISSN:
1018-5941
Pages:
27
Keywords:
WP; asset; cost; liability; investment; ratio
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper focuses on the nexus between pension funds' balance sheet liabilities, reflecting their age profile and payments obligations, and the investment behavior and costs of these funds. The context of the analysis is the stringent regulatory framework and the highly fragmented and heterogeneous pension fund landscape in Switzerland. Detailed data from the Swiss Pension Statistic are analyzed using multivariate OLS-regressions. The evidence shows that a younger age structure and lower short-term benefits payouts are related to a higher share of equities and lower real estate holdings. Legal form, pension plan type, and size are important for administrative costs. The findings support the view that aging may lead to increased risk aversion and thus to a lower engagement of institutional investors in equities.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund