A Study on the Supervision of Taiwan’s Pension Funds

• Main Authors: Chin-Lin Lai, 賴勁麟
• Other Authors: Kuo, Cheng-kun
• Format: Others
• Language: zh-TW
• Published: 2005
• Online Access: http://ndltd.ncl.edu.tw/handle/48018255597363723755

碩士 === 國立臺灣大學 === 商學研究所 === 93 === This thesis intends to analyze the differences among the three major pension funds by comparing their supervisory organization, investment management, risk control, and performance evaluation, in order to make constructive suggestions for future improvements on the three funds and the new labor pension fund in Taiwan. The three funds are the Labor Pension Fund, the Labor Insurance Fund, and the Public Service Pension Fund. The research first utilizes up-to-date numerical data and mostly first-hand materials to produce initial categorized analysis. Then, the analysis is augmented by conducting qualitative in-depth interview and quantitative survey of questionnaire with 23 experts who participated in the past operation of the three funds. The main conclusions are：（1）The supervisory function is limited due to the fact that the organization of the three supervisory committees lays more emphasis on representation, rather than on the professional and independence aspects. The supportive staff also lacks professional expertise.（2）The investment management biases toward conservative strategies, because both the Labor Pension Fund and the Public Service Pension Fund make the interest rate of on two-year deposit as the target rate of return. On the other hand, the investment performance of outsourcing（designated management） is not satisfactory because of the low fees of outsourcing due to the open tender method, too short duration of outsourcing, as well as limited ability to supervise.（3）The risk control of the three funds usually put more emphasis on pre-investment stage precautions and limits. This means the risk control in the course of investment and the overall portfolio risk management should be strengthened. Furthermore, the level of the risk control department should be raised and the information should be adequately publicized to enhance transparency.（4）In the past, the three funds adopt generally accepted accounting principles and use the Lower-of-Cost-or-Market approach to evaluate the asset every half a year, rather than using the market price approach. Also, the guarantee of minimum rate of return and the mechanism of National Treasury’s subsidy all have influences on the evaluation system of stock investment.（5）The new labor pension scheme of defined contribution lays emphasis not just on security but also more on investment performance. The newly proposed Government-Corporation approach which is characterized by flexible personnel management, as well as organizational and salary structure, should be a better choice as to have the benefits of both the flexibility of private enterprises and the credibility of governmental public services.