The Fund Industry: How Your Money is Managed, 2nd Edition

APPENDIX to Chapter 18

Gathering Fund Assets through Retirement Plans

In Chapter 18, we reviewed the challenges faced by fund management firms in gathering assets globally and the main models for overcoming those challenges. We took a close look at the most successful model for cross-border asset gathering—the UCITS model—which allows sponsors to sell fund shares in multiple countries.

In this Appendix, we continue our examination of asset-gathering outside of the United States and Europe, but shift our focus to pension plans, which are important sources of assets throughout the world. Not surprisingly, pension assets are larger in countries with more wealth (defined in terms of GDP). Similarly, pension assets per capita are higher in countries where more of the population is older (defined as age 65 and over).¹

Before you read on, please note that we assume throughout this discussion that you are familiar with retirement plan terminology. If that's not the case, you might want to read Chapter 12 on 401(k) plans first.

Pension assets may be part of a governmental plan or part of a private retirement system run by employers or other private groups. Countries with systems that have a larger private component tend to have more pension assets per capita than countries with plans that are largely run by the government, as Figure 18A.1 illustrates.

Privatized systems are more likely to be organized as defined contribution plans rather than defined benefit plans, as shown in Figure ...