Pension Funds And The Bottom Line

Author:  Keith P. Ambachtsheer

dscf0041For each employee to value a retirement scheme as part of their overall compensation, they must understand it.

As society ages, there will be fewer workers to support each pensioner in the decades ahead. The productivity of labor and capital has to keep increasing, or else the standard of living we enjoy will fall. Pensions funds will play a large role in determining North American Living Standarts. Companies have rules on how their pensions are managed. “Funds Goals: The Primary purpose of the fund is to secure the benefit promises made by the corporation under the terms of its pension plan to its former and current employees. Subject to achieving this primary goal, the fund will be managed so as to make a measurable contribution to corporate profitability. “Chapter Two: Corporate Pension Funds: Getting the Goals Right, PG 29”. Companies are becoming too short term oriented, looking at the pension results every three months causes money managers to become less like investors and more like gamblers in a casino. This trading causes market instability and the broker/dealers benefits from large commissions each time transactions are executed. Keith Ambachtsheer studied economics and finance at the Royal Military College of Canada, the University of Western Ontario and Mc Gill University. He was an investment analyst with Sun Life Assurance and is vice – chairman of the Financial Research Foundation of Canada.

 

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