Pension Funds and Financial Markets: Evidence from the New EU Member States

22 Pages Posted: 26 Jan 2012

See all articles by Christiane Nickel

Christiane Nickel

European Central Bank (ECB)

Nadine Leiner-Killinger

European Central Bank (ECB)

Michal Slavik

European Central Bank (ECB) - Directorate General Economics

Date Written: March 26, 2009

Abstract

The recently established pension funds in the new EU Member States face investment risks that stem from a challenging macroeconomic environment, including, inter alia, volatile inflation and shallow domestic capital markets. The question arises whether a move to funded pension system in such a volatile economic environment always increases the long-term sustainability of public finances. Against this background, this paper surveys the main challenges for pension systems and public finances in the new EU Member States and provides evidence on pension fund performance in recent years. We conclude that in some of these countries the limited diversification of assets, the impact of high inflation as well as the financial market turmoil may have indeed reduced the positive impact of systemic pension reforms on fiscal sustainability.

Suggested Citation

Nickel, Christiane and Leiner-Killinger, Nadine and Slavik, Michal, Pension Funds and Financial Markets: Evidence from the New EU Member States (March 26, 2009). Available at SSRN: https://ssrn.com/abstract=1992450 or http://dx.doi.org/10.2139/ssrn.1992450

Christiane Nickel (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Nadine Leiner-Killinger

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Michal Slavik

European Central Bank (ECB) - Directorate General Economics ( email )

Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany

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