There are many who want to take away pensions and some cite poor performance as one of the reasons to allow the individuals to run their own plans. However when we look at the performance
of Pension Funds Positive investment returns in 2014 and also over the last 5
and 10 years we can see that the growth of
pension fund assets in 2014 was underpinned by positive investment returns.
All
the reporting OECD countries recorded positive real net 3 investment returns in
2014, ranging from 1.2% in the Czech Republic to 16.7% in Denmark, with an OECD
weighted average of 5.0% (Figure 7).
The simple
average is higher, at 6.8%. Twenty-one OECD countries experienced real returns higher
than 5%. Outside the OECD area, the performance of pension funds in terms of
real net investment returns was also positive, but returns were lower than in
the OECD area on average: 1.2% for the weighted average and 4.6% for the simple
average (Figure 8).
India experienced the highest level of investment returns
among non-OECD countries at 19.1%. Only four non-OECD jurisdictions had real
negative investment returns in 2014: Armenia (-1.7%), Nigeria (-1.7%), Hong
Kong (China) (-3.2%) and the Russian Federation (-7.4%). The existence of
management costs reduces nominal returns which combined with high inflation may
lead to negative real return
Figure 7.
Pension funds' real net rate of return on investment in selected OECD
countries, Dec 2013 - Dec 2014 In per cent Figure 8. Pension funds' real net
rate of return on investment in selected non-OECD countries, Dec 2013 - Dec
2014 In per cent. Source: OECD
Global Pension Statistics.
The results are positive and even more so when they are compared to real growth rates in these countries. (same source)
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