Pension Funds, Life Assurance and General Insurance Flashcards
In terms of a pension fund what is asset allocation determined by mostly?
o Determined, at least in part, by the ‘maturity’ of fund
Describe the time horizon of a pension fund
o Based on employee retirement dates (when are pensions due to be paid out)
o Generally long-term liabilities
What will the liquidity of a pension fund be?
o Immature fund: low
o Mature fund: higher (to cover pension payments)
How are pension funds taxed?
Fund: income and gains within the fund are not taxed
In terms of a life assurance fund what is asset allocation determined by mostly?
Similar to pension funds - Determined, at least in part, by the ‘maturity’ of fund
Describe the time horizon of a life assurance fund
Long terms
Describe the liquidity of a life assurance fund
Slightly greater liquidity needs than pensions
Describe the asset allocation of a general insurance fund
Heavily weighted to short-term assets
Describe the time horizon of a General insurance fund
Immediate claims on an ongoing basis
Describe the liquidity in a typical General Insurance fund
Premiums pooled into securities which are highly liquid
