The creation of a comprehensive pension system is a vital part of a strategy to relieve poverty in old age. Pay-as-you-go systems in which the current generation of taxpayers funds the pensions of their parents and grandparents through general taxation are increasingly regarded as untenable. So most modern or reformed pension systems are pre-funded by means of contributions during a working lifetime. This results in the build-up of substantial pension savings that need to be invested.
As a result pension funds have become the most important institutional investors in many countries. As such their proper regulation and efficient management are matters of concern to governments and regulators.
Cadogan Financial’s work in the area of pensions complements its expertise in the development of investment funds, since defined contribution pension funds are simply investment funds with some additional tax privileges and restrictions.
In Tanzania Cadogan Financial carried out a study of the existing pension system and relevant laws, regulations and policies in the sector and made proposals for legal and regulatory reform, drafting a new law to implement these.
In Vietnam Cadogan Financial advised the government on the design and development of third and second pillar defined contribution pension/provident schemes to supplement the existing State scheme. This included a comprehensive survey of similar schemes in particular those in neighbouring Asian countries; and drafting a decision tree and planning chart for decision making.
In Tanzania Cadogan Financial worked closely with the social security regulator to examine the portfolios of each of the five existing pension schemes to determine whether or not they might be able to meet target returns and sustain benefits and to advise on whether actuarial reports were up to best international standards.
We also undertook an actuarial assessment of the Zanzibar Social Security Fund to assess its ability to meet its commitments.
