Publication: Public Management
Date
2000-01
ISSN
Published
2000-01
Author(s)
World Bank
Abstract
This Note on public management of
pension funds concludes that publicly-managed pension
reserves are often used to finance non-pension policy.
Public pension fund managers tend to invest based on
objectives unrelated to pension provision. These include
social and economically target investments such as housing.
Often governments look to pension reserves as a convenient
and cheap way to finance deficits. One result is that public
management produces poor returns relative to what could
potentially be earned. Any pre-funding of long term pension
obligations requires some minimal level of good governance.
Although good governments perform better, public management
produces inferior returns across all countries. As a result
members of the scheme have to pay higher contributions or
receive lower benefits. The evidence suggests that public
management of pension reserves should generally be avoided.
Citation
“World Bank. 2000. Public Management. World Bank Pension Reform Primer Series. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/58487b5a-def9-587b-b6f4-3d04b301eafa License: CC BY 3.0 IGO.”