Newcastle University Business School

Event Item

Group and individual personal pension schemes: Who is fairest of them all?

A Behavioural Research in Finance research seminar

Date/Time: Thursday 4 May, 15.00-16.30

Venue: Room 2.08, Newcastle University Business School

Speaker: Professor Ania Zalewska

Join Professor Ania Zalewska as she talks about her research on group and individual personal pension schemes.

Her paper studies the performance of a sample of 14,429 individual personal pension (IPP) funds and 1,681 group personal pension (GPP) funds over the 1986-2015 period to test whether there is evidence that pension providers provide less attractive investment opportunities to the atomless IPP than the GPP investors protected by bargaining and market power of their employers. If markets were frictionless and without asymmetries of information, one would expect no differences in the performance between the GPP and the IPP funds after matching for such common characteristics as investment style, fund age, size and provider.However, if GPP contracts are more ‘valuable’ to the pension providers than the IPP ones, then GPP funds may outperform IPP funds.

The paper provides a simple theoretical model and empirically shows that the GPP funds outperform the IPP funds. These results have important implications for investors and policy makers.

About the speaker:

Professor Ania Zalewska's primary research focuses on studying implementation and consequences of regulation, issues of the pension industry with a focus on pension reforms, pension funds’ performance and asset allocation, and impact of pension reforms on the development of financial markets. She also researches corporate governance (managerial incentives, board issues, capital and ownership structure), corporate finance (privatisation, valuation and performance of initial public offerings, modelling and estimation of market risk) and issues of emerging markets (development, investment opportunities, integration and efficiency).