|This paper by John Walton is written in a purely personal capacity and the views herein should not be attributed to any part of Eurostat.
The purpose of this note is to look at the activities of pension funds and life insurance companies: how can their activities be distinguished, and how far do pension funds purchase the services of life insurance companies or of other financial intermediaries (S.123)? It is largely based on the situation in the UK and on the author's personal association, up to 1995, with a UK ?defined benefits? pension fund. The author has also drawn on the development in Europe of a harmonized system of business statistics for both life insurance undertakings and pension funds.
The authors discusses investment risks, mortality risks and survivorship risks.
He also looks at some matters which are more peripheral to these questions, such the valuation of the assets and liabilities of ?defined benefits? pension funds and the macro-economic aspects of a greater or lesser degree of funding. The author uses the notion of "actuarial value of assets". Particularly in the case of ?defined benefits? pension funds, practice probably varies from country to country, and he hopes that this note may stimulate contributions from others.
John Walton was consultant to Eurostat (Unit B.1 and D.2).
The author of this contribution to the discussion group on this site bears the sole responsibility for both the substance and the style of the contents. The purpose of the discussion group is to elicit comments and to promote debate on specific topics. As such, the views expressed on any of the issues raised are not to be attributed to the IMF.