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The Trends and Challenges for Private Pension Funds

The Trends and Challenges for Private Pension Funds . Denise Lamaute Sofia, Bulgaria February 16-18, 2005. The Challenges Ahead. Maintaining the Integrity of the Reformed Pension System Putting Beneficiaries First. Pension Reform Integrity. Prudential regulation and supervision

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The Trends and Challenges for Private Pension Funds

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  1. The Trends and Challenges for Private Pension Funds Denise Lamaute Sofia, Bulgaria February 16-18, 2005

  2. The Challenges Ahead • Maintaining the Integrity of the Reformed Pension System • Putting Beneficiaries First

  3. Pension Reform Integrity • Prudential regulation and supervision • Unassailable financial, accounting, and record keeping systems • Greater efficiency, reliability and transparency

  4. Outside Forces • Greater international diversification • A stable and sustainable macroeconomic environment • Balance between the regulators and pension funds • Healthy competition to minimize the costs of managing retirement fund assets • Participants becoming owners

  5. International Issues • EU Harmonization and Accession • Corporate Governance • Socially Responsible Investment (SRI) • Adopting and Implementing International Standards and Best Practices

  6. Putting Beneficiaries First • Expanding Coverage to Informal Sector, Agricultural Workers, and Others • Managing the Expectation of Participants • Expanding Financial Literacy Education Programs • Providing Greater Control and Choice to Participants

  7. The TRENDS • Think Globally • Use More Technology

  8. Adopt a Global Perspective • The growth of pension assets having an enormous impact on capital markets globally • An evolving financial landscape that exploits new global opportunities for greater returns with less risk (new securities) • Internationally acceptable risk-management standards • Industry focus on educating participants on their plan benefits and the basics of investing

  9. Global Investing • Home-country pension constraints lifted • Country focus replaced with global sector focus • Alternative investments – LBOs, Venture Capital, Hedge Funds, Derivatives • Performance based fees

  10. Technology Issues • Continuous Investment in Upgrades and New Systems • Customized portfolios and statements driven by technological advancements in recordkeeping, trading and reporting • Faster, Faster, Faster and That’s Only the Beginning

  11. Technology Horizon • Merging of Telephone, Computer, Internet, Satellite and Video • Real Time Everything • Easy Access • Greater Efficiency • Lower costs • Reliable Systems • Secure Transactions

  12. In Summary The Challenge: Stability, Inclusion, Education and Efficiency The Trend: Global Perspective and Increased Technology

  13. Thank you! Denise Lamaute dlamaute@usaid.gov

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