Pension Fund Board Governance and Asset Allocation: Evidence from Switzerland

Journal of Pension Economics and Finance (JPEF), forthcoming

49 Pages Posted: 6 Mar 2019 Last revised: 8 Feb 2022

See all articles by Nadège Bregnard

Nadège Bregnard

University of Neuchatel

Carolina Salva

University of Neuchatel - Institute of Financial Analysis

Date Written: October 1, 2021

Abstract

We study whether pension fund board governance relates to asset allocation. Pension funds with well-governed boards have greater international diversification, lower cash holdings and, when pension funds are small, invest more in risky assets. In particular, pension fund boards that establish comprehensive investment policies invest more in equities, in foreign assets and hold less cash. We argue that a comprehensive investment policy is likely to serve as a proxy for the financial expertise available to the fund while it provides the set up to facilitate decision making. Finally, we further show that the presence of external financial experts is also associated with lower cash holdings.

Keywords: Pension Funds, Board Governance, Asset Allocation, Switzerland

JEL Classification: G11, G20, G23

Suggested Citation

Bregnard, Nadège and Salva, Carolina, Pension Fund Board Governance and Asset Allocation: Evidence from Switzerland (October 1, 2021). Journal of Pension Economics and Finance (JPEF), forthcoming, Available at SSRN: https://ssrn.com/abstract=3334950 or http://dx.doi.org/10.2139/ssrn.3334950

Nadège Bregnard

University of Neuchatel ( email )

Switzerland

Carolina Salva (Contact Author)

University of Neuchatel - Institute of Financial Analysis ( email )

AL Breguet 2
CH-2000 Neuchatel
Switzerland

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