Pension fund investment and regulation - a macro study

Pension fund assets have been accumulated rapidly during the past decades, and it is evident that this trend will continue. An immediate problem arising from the rapid accumulation of such a large volume of assets across countries is how to invest them. Pension funds differ from other institutional investors, e.g. mutual funds, in that their investment horizons are relatively long, typically 30-40 years. In addition, they are pooled assets to support people’s retirement lives. The authorities have a policy concern about their investment performance, because otherwise, the shortfalls will have to be met by the nation state (Clark and Hu 2005a). In this paper, we seek to address this issue from the macro perspective. By using a unique dataset covering 39 countries (17 EMEs and 22 OECD) and based on the classic mean-variance optimisation approach, first we find a negative impact of international portfolio investment restrictions on pension fund returns and risk, and this issue is particularly serious for EMEs. Following a shift from the QAR to the PPR, the average risk is expected to fall by 27% for EMEs pension funds, while the figure is 10% for OECD pension funds. Second, there is evidence that if higher portfolio returns are wanted, higher proportion should be invested in equities and foreign assets. Third, our results show that pension funds should value the diversification benefit arising from property investment (Booth 2002)

Are Canadian pension plans disadvantaged by the current structure of portfolio regulation?

We investigate the performance of Canadian pension funds relative to those from the UK and US, in the light of the ongoing quantitative asset restrictions that still apply in Canada, compared with the purer prudent person approach in the UK and US. We find that although Canadian funds often obtain better combinations of return and risk, returns are often less than could be obtained given financial market conditions, as shown by dummy portfolios split evenly between bonds and equities, or diversified into real estate, as well as mean-variance optimal portfolios. In contrast, UK and US funds typically outperform such benchmarks. Combined with criticisms of specific Canadian regulations in the light of finance theory and empirical evidence, the paper makes a case for removal of residual quantitative restrictions in Canada, and their replacement by sole prudent person regulations

Is there a link between pension-fund assets and economic growth? - A cross-country study

Debate over superiority of pension funding over pay-as-you-go links notably to the question whether funding improves economic performance sufficiently to generate additional resources to meet the needs of an ageing population. To address this issue, we design a modified Cobb-Douglas production function with pension assets as a shift factor, and investigate the direct link between pension assets and economic growth employing a dataset covering up to 38 countries, using a variety of appropriate econometric methods. We find positive results for both OECD countries and Emerging Market Economies (EMEs), with consistent evidence for a larger effect for EMEs than OECD countries

Pension reform, economic growth and financial development - an empirical study

Pension reform is one of the biggest challenges facing national governments. How to reform the old pay-as-you-go (PAYG) systems is still under hot debate; one of the most influential funded pension schemes is designed by the World Bank. In the second chapter of this paper, we first review the arguments for and against the PAYG and then critically discuss the World Bank model by drawing on related literature. The third chapter of this paper presents our empirical results. Regarding the link between economic growth and pension reform towards World Bank model, our panel estimation suggests a negative relationship in the short run and positive relationship in the long run, although the results for OECD countries are not very statistically robust. The second empirical work is focused on pension fund assets and economic growth. A positive link between these two variables is found by our standard economic growth specifications; in addition, there is evidence that pensions are a good predictor of economic growth. This result is then consolidated by our Panel Granger causality test. The last empirical work deals with the relationship between pension assets and financial development. On balance, our Panel correction model and Panel Granger causality test suggest that pension funds growth leads financial development, although some sub-group estimations are not strong. In addition, there is evidence that traditional banking industry is declining relative to other financial institutions, but not, even increasing relative to the economy

Pension reform in China - a case study

China is a relatively young country now, but about to undergo a remarkable demographic transformation in the near future. Despite foreseeable dramatic demographic changes, the current retirement system in China is badly structured, and not able to cope with the rapid ageing population in this century. The purpose of this study is threefold. First, we seek to provide a comprehensive historical review and detailed analysis of the Chinese pension system with an ultimate ambition of finding solutions to China’s pension crisis. Second, we place the analysis of pension reform in the broader economic context, in order to identify the interaction between pension reform, economic growth and financial development. One purpose is to assess the reform conditions in China. Third, with particular reference to a simulation model, policy alternatives are proposed that could help make the Chinese pension system sustainable in the long run. Based on our critical analysis and empirical work, we find that first, China meet the basic requirement to start pension reform, second, in order to improve the current Chinese pension system, a range of institutional and practical changes need to be undertaken. They include unifying the system across the country to reduce the transaction costs, redesigning the system so it is fair to the current working population, diversifying pension fund portfolios to achieve a high and stable return, preserving traditional family support to serve as an income provision cushion in the short and medium term, and maintaining a stable macro-economy to protect the real value of pension assets

Tolerance of banana for fusarium wilt is associated with early H2O2 accumulation in the roots

Banana plants derived from a tissue culture process possess a high rate of random variations that were widely used as popular cultivars due to the new desired traits. In this study, two near-isogenic lines, one susceptible (parental Williams-8818) and the other resistant (somaclonal variation progeny Williams-8818-1 from Williams-8818) to Fusarium oxysporum f. sp. Cubense (Foc4), were inoculated with race 4 of F. oxysporum (Fox). Production of O2•− , H2O2 and MDA, as well as changes in enzyme activities, and transcript levels of SOD and CAT in root extracts were monitored every 24 h over 4 days. The histochemical location of H2O2 was also detected. In the resistant iso-line, the accumulation of O2•− and H2O2, and the activation of SOD occurred in the first 24 h, but activation of CAT reached its maximum only after 48 h. All changes were generally lower in the susceptible iso-line when compared to the resistant iso-line. SOD transcripts were further up-regulated until 72 h in the resistant iso-line, but not in the susceptible iso-line. CAT expression was not affected in any of the two iso-lines. This suggests that expressions of the two key genes in the antioxidant system are less suitable indicators for Foc resistance in banana. In contrast, the first “oxidative burst” is a better indicator for different susceptibility of banana to Foc.Key words: Banana, Fusarium oxysporum, catalase, reactive oxygen species, somaclonal variation, disease resistance

Modeling of the current density distribution under surface posterior-tibial-nerve electric stimulator

Stimulation of the posterior tibial nerve is commonly used in the measurement of somatosensory evoked potential (SEP). To improve the efficiency of stimulation, the potential field and current density distributions under the surface electrodes were modeled and simulated. In our model, three layers were assumed: (1) the air environment, (2) electrode and paste (3) human body (skin and soft tissues). The mirror method was used to analyze the potential field of point charge. Integration of the field and the area of the stimulus gave the potential field of one surface electric pole. The potential field distribution of the bipolar stimulator was obtained by superimposition of two unipolar fields. Finally, the current density distribution was calculated by Laplace equation. The analytical solution of the potential field was found and the numerical solution of the current density distribution calculated. The potential field and current density distributions were simulated by 2-D plot. From the model and simulation, the potential and current density distributions were not found to be uniform under transcutaneous stimulation electrode and the maximum current density is located under the poles. We recommend that bipolar stimulator should be applied axially along the stimulated nerve course.published_or_final_versio

Photoinduced Dehydrogenation of Defects in Undoped a-Si:H Using Positron Annihilation Spectroscopy

We report changes in variable-energy positron annihilation spectroscopy measurements on undoped hydrogenated amorphous silicon films after light soaking. The change, seen predominantly in the high momentum band of the annihilation radiation, is not reversed by thermal annealing. We suggest, following recent models of the Staebler-Wronski effect, that light exposure induces hydrogen trapped in vacancylikc detects to become mobile in the Si network. The observations place constraints on models of hydrogen motion fitting macroscopic Staebler-Wronski effect kinetics and may help to achieve a definitive description of metastability in a-Si:H.published_or_final_versio

The effect of cigarette price increase on the cigarette consumption in Taiwan: evidence from the National Health Interview Surveys on cigarette consumption

BACKGROUND: This study uses cigarette price elasticity to evaluate the effect of a new excise tax increase on cigarette consumption and to investigate responses from various types of smokers. METHODS: Our sample consisted of current smokers between 17 and 69 years old interviewed during an annual face-to-face survey conducted by Taiwan National Health Research Institutes between 2000 to 2003. We used Ordinary Least Squares (OLS) procedure to estimate double logarithmic function of cigarette demand and cigarette price elasticity. RESULTS: In 2002, after Taiwan had enacted the new tax scheme, cigarette price elasticity in Taiwan was found to be -0.5274. The new tax scheme brought about an average annual 13.27 packs/person (10.5%) reduction in cigarette consumption. Using the cigarette price elasticity estimate from -0.309 in 2003, we calculated that if the Health and Welfare Tax were increased by another NT$ 3 per pack and cigarette producers shifted this increase to the consumers, cigarette consumption would be reduced by 2.47 packs/person (2.2%). The value of the estimated cigarette price elasticity is smaller than one, meaning that the tax will not only reduce cigarette consumption but it will also generate additional tax revenues. Male smokers who had no income or who smoked light cigarettes were found to be more responsive to changes in cigarette price. CONCLUSIONS: An additional tax added to the cost of cigarettes would bring about a reduction in cigarette consumption and increased tax revenues. It would also help reduce incidents smoking-related illnesses. The additional tax revenues generated by the tax increase could be used to offset the current financial deficiency of Taiwan's National Health Insurance program and provide better public services