Question

Formulate opinion is 250 words:

Point No. Pension fund managers should focus on assessing stock valuations and determining

which stocks are undervalued or overvalued. If pension funds own stocks of firms that perform poorly, the pension fund managers can penalize those firms by dumping those stocks and investing their money in other stocks. If pension funds focus too much on corporate governance, they will lose sight of their goal of serving the pension recipients.

Counter Point Yes. To the extent that pension funds can use governance to improve the performance

of the firms in which they invest, they can improve the funds’ performance. In this way, they also improve the returns to the pension recipients.

Use the Internet to learn more about this issue and then formulate your own Opinion and Discuss.

Answer 1

Pension funds act as a collective investment unit which manages savings of people by investing money in various financial market instruments. At the core of pension fund operations are three types of activity: premium collection, investment of sums collected and benefits paid. End objective of pension funds are to manage the fund in such an effiecient manner that it protects the savings of employees and provide them fair return without taking undue risk. Pension funds are largest investor in equity market in world and they have capacity to drown a Company's market value however seldom do they resort to these practices. Pension funds in various cases has acted in tandem to bring changes in corporate governance to save their investment to protect of employees pension.