Institutional Investors Managing Investment Portfolios. Tieu JD Ngao

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СКАЧАТЬ of the fund for at least 3 years (preferably 5 years) before comparing good faith performance of a passive direct indicators with the same type of investment (e.g., large-cap stocks). This is a key performance indicator.

      • The selected fund must:

      Managed by a bank, an insurance company, an investment management company or an investment adviser (as defined by the Law on registered investment advisor in 1940) which was largely financed production management were at least 10 years and has found financial stability in that period.

      Provide data on the quarterly performance is calculated including the time factor and the report on the total amount of fees and charges net.

      Provide effective assessment indicates risk profile investment - profit of managers in relation to the passive index management and the other with the same type of investment.

      Yet clear investment strategy applied and the documents proving that this strategy has been successfully applied over time.

      • The transfer of funds between the investment fund is allowed in at least a quarter time, in order to satisfy the requirements of ERISA 404 (c)

      Effective monitoring of investment: RPC will monitor investment performance and risks of each fund quarterly compared to landmark reasonable investment efficiency. In the case of a fund over a period of 5 years:

      • Activity is less effective than an index fund with similar objectives (e.g. the same type of investment) or

      • Rated less than 50% of funds with similar investment objectives in terms of investment efficiency.

      RPC will review the fund to determine whether the performance of the fund by the fund managers, management practices or changes of the market, which will then decide whether the fund should be removed from the portfolio investment option or not. RPC will also review the performance of the fund over a period of five years, if possible, before making a decision.

      As pointed out above, the RPC will evaluate the performance of each fund over a period of 5 years. RPC noticed that most of the investments are cyclical; therefore, at a time when a fund may not achieve the investment objectives or

      When the fund failed to achieve the expected performance. The effect of this fund should be reported in the form of an annual rate of return taking into account the time factor. As mentioned above, these profits need to be compared with the appropriate index and similar funds in the most recent 5-year period (or longer).

      In assessing the performance of each fund, authorized RPC recommendations change or delete a goal or an investment fund if the investment standpoint of RPC, objectives or investment funds that do not or is expected to achieve the targets specific activities; no longer fit the needs of Members or;, or if the point of view of the RPC, when a more appropriate investment options appear.

      A member of the Commission of BMSR responsible investment of funds rapidly developing small cap stocks. Within two years, the fund has ranked in the top small cap investment funds grow faster and more efficient operation compared to a passively managed index include small chemical tyvon increase rapid growth. However, the value of the fund fell more than the overall market. Investment committee members have proposed alternative to RPC funds. Does the target in the investment policies support the proposal?

      Answer: According to the instructions in the written investment policy, investment performance should be evaluated over a period of more than two years. The investment policy also specified on comparing the performance of an index fund is managed passively with similar investment style rather than with the common market. For these reasons, The investment policy can not support the proposal for the replacement of funds.

      2.3. The mixed plans and other plans

      In the 90s, many employers conclude that the structure of traditional DB plans or DC plan structure can achieve their retirement plan correctly. Joint plan began to emerge, combining the features of DB and DC plans. Examples of mixed plans include cash balance plan, pension plan shares, target benefit plans and floor plans. These plans try to combine several valuable features of a DC plan (as flexible, easy to manage, and easy to understand by the participants) with the best features of DB plans (such as guaranteed benefits, compensation for work time and the ability to link pension payments to a part of the salary). In this section, we discuss the cash balance plan as an example of the mixture as well as a plan other important plan is the implementation plan for employee stock ownership (ESOP) .

      Cash balance plan is a DB plan in which the employer shall bear the investment risk. But for employees here like a DC plan because they provide a personal statement account balances, debts annual contribution income and debts. Contribution debt as a percentage of income based on age while debt as a percentage of income increase in the balance

      These funds usually associated with long-term interest rates. In fact, the account balance is only hypothetical because, unlike a DC plan, the employee does not have a separate account. Some plans allow investment choice between bonds and stocks, which had introduced the investment risk to employees.

      Cash balance plans often not the original plan which is the traditional DB plan to switch them some characteristics of DC plans. Some of these plans have been controversial is unfair to workers with seniority accumulated pension benefits inherent in a DB plan higher than the cash balance plan. To answer this criticism, some companies have proposed a clause 'grandfather "for longtime workers, allowing them to be able to choose between taking a new cash balance plan or continue with the current traditional DB plans.

      Finally, most of the developed countries allow pension plan or other savings plans to encourage employees to become shareholders of the employer. these plans can be complex qualified plan and buy shares from a DC plan with pre-tax income, or they may be simple savings plan allows employees to purchase shares their after-tax income. Clusters from ESOP suggest to a stock ownership plan of the company employees (in the U.S.) or plan to own shares of the company (in the UK). This is the DC plan from all or most of the income of the employee rate. Final value of the plan will depend labor transfer process, the level of contributions and stock price changes.

      Although ESOPs have a common goal is to increase ownership of the employees in a company, they can change depending on countries with different terms. An ESOP can sell shares to employees at a price lower than the market, while the other ESOP plan. Some ESOP plan requires contributions from employees, while some prohibit it. Some fund ESOP can borrow money to buy a large amount of stock of the employer, while a number based on the amount contributed.

      To encourage ownership of the company's equity, ESOP plan had been used by the company to liquidate a large stock holding company between by an individual or a small group of investors, to avoid issuing shares or discourage a sale unfriendly merger has placed a large amount of shares in the hands of employees through the ESOP fund. In addition to investments in the ESOP plan, a plan member can have large human capital investments in the company through working for that company. If the company collapsed, participants can see their ESOP investment to fall at the right time they are unemployed. A concern for ESOP participants is their total investment (both financial and labor) reflects proper diversification.

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