02-23-2005, 02:43 AM
<b>Hedging of pension funds</b> that's way too narrow of a topic. you could expand it to Pension Fund Management Strategies. One of those strategies, a relatively recent one, is to place some of the assets under management in a Hedge Fund. Pension funds have very strict investing policies, they can't take on a lot of risk.
There are also some other methods of managing occupational pension schemes
1. Purchase an 'off-the-shelf' policy from an insurance company, so that the trustees simply hand over the contributions to an insurance company, and the insurance company's actuary will advise on the level of contributions relative to the benefits promised.
2. The trustees may decide to participate in a non-discretionary fund run by an insurance company (called insured fund management, though it is unlikely that the insurance company will provide any guaranteed return) or other financial institution. Under this scheme the fund is managed independently of the trustees, through a 'pooled fund' operated by the insurance company. Pooled investment management is usually adopted by small funds, with the resources of a group of funds being placed in the same investment fund. The pension fund trades in the units of the investment fund, where the value of the units reflects the value of the underlying assets. Pooled funds operate through two types of legal entity exempt unit trusts and managed pension funds.
3. The trustees may manage the fund themselves indirectly by delegating the task to one or more financial intermediaries (called segregated or self-insured fund management), who would typically design a tailor-made investment mandate agreed between the trustees and the financial institution. Segregated management is usually adopted by medium-sized funds where there is some attempt to match the assets in which the fund is invested to the fund's liabilities. The trustees may decide to employ one financial institution to manage the bond portfolio, another to manage the equity portfolio etc.
4. The trustees may manage the fund themselves directly (in-house fund management) by appointing one or more investment managers, who are employed by the fund.
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If I could... Then I would... Turn back time!!
There are also some other methods of managing occupational pension schemes
1. Purchase an 'off-the-shelf' policy from an insurance company, so that the trustees simply hand over the contributions to an insurance company, and the insurance company's actuary will advise on the level of contributions relative to the benefits promised.
2. The trustees may decide to participate in a non-discretionary fund run by an insurance company (called insured fund management, though it is unlikely that the insurance company will provide any guaranteed return) or other financial institution. Under this scheme the fund is managed independently of the trustees, through a 'pooled fund' operated by the insurance company. Pooled investment management is usually adopted by small funds, with the resources of a group of funds being placed in the same investment fund. The pension fund trades in the units of the investment fund, where the value of the units reflects the value of the underlying assets. Pooled funds operate through two types of legal entity exempt unit trusts and managed pension funds.
3. The trustees may manage the fund themselves indirectly by delegating the task to one or more financial intermediaries (called segregated or self-insured fund management), who would typically design a tailor-made investment mandate agreed between the trustees and the financial institution. Segregated management is usually adopted by medium-sized funds where there is some attempt to match the assets in which the fund is invested to the fund's liabilities. The trustees may decide to employ one financial institution to manage the bond portfolio, another to manage the equity portfolio etc.
4. The trustees may manage the fund themselves directly (in-house fund management) by appointing one or more investment managers, who are employed by the fund.
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If I could... Then I would... Turn back time!!