Sector Insights

Pension Funds DIY

A Hands-On Future for Asset Owners

November 2014

The pension industry is undergoing dramatic change. A long period of low interest rates has reduced returns on assets and made it harder for pension funds to meet their long-term liabilities.

Pension funds around the world are experimenting with new ways to invest and deliver value to their members. They are taking control by insourcing asset management and overhauling their approach to risk and governance.

Our research with over 130 pension fund executives sheds light on some key questions, as firms adapt to a new landscape:

  • How can funds balance a greater risk appetite with the demands for more robust risk management?
  • How can they pursue a strategic approach to insourcing that reduces cost and improves performance?
  • What criteria will they use to select external managers and service providers?
  • How can they fortify their governance foundations as they take on the risks associated with greater insourcing?
  • And where do they need to invest in new tools and talent to ensure they have the necessary capabilities?


About the Research

The international State Street survey was conducted by the Economist Intelligence Unit in August 2014. The information presented is based on the survey results of 134 senior executives in the pension fund industry. Respondents are from 15 countries, with the majority being drawn from the US, UK, Australia and Canada. Just over half (52 percent) of respondents came from public sector pension funds, 31 percent from private sector pension systems, and 16 percent from superannuation funds.

Pension funds need to achieve an integrated view of risk-weighted performance across multi-asset portfolios. For many, this will require investment in new tools and data infrastructure.