This article was originally published at Morganist Economics and is copyright (C) 2020 Peter James Rhys Morgan. The link to the original posting of the article is below. http://morganisteconomics.blogspot.com/2020/07/pension-fund-easing.html Pension Fund Easing. By Peter Morgan. 15:02 25/07/2020. Pension fund assets make up a large segment of the overall investment market. The size of the existing pension saving investment asset market provides an opportunity for an innovative macroeconomic control tool through altering or rearranging how the funds are utilised. When investments are placed money is transferred to another organisation to spend on the agreement that the funds are repaid at a later date or a percentage of ownership of the entity is given to the investor. The use of the funds invested varies from one organisation to another. Depending on how and when the funds invested are spent the velocity of transactions can be increased or decreased. The greater the number of transactions in an economy during a period of time the higher the level of demand generated, more transactions equals more demand. By selecting organisations that offer a faster or slower investment transaction velocity it is possible to increase or decrease overall economic demand. The mechanism could also be used to control excessive aggregate price inflation or depressive aggregate price deflation. This pension investment fund spending velocity mechanism can be made possible by the introduction of a pension fund investment 'Requirement'. The use of 'Required' pension fund investments enables economic control by rearranging pension fund investment composition. The first option to alter the velocity of transactions through pension fund investment changes is by managing the movement of investments into and out of an economy. Keeping money in an economy will increase demand, taking money out of an economy will decrease demand. The second option to alter the velocity of transactions through pension fund investment is to invest in entities with faster or slower rates of spending. Usually debt funds such as credit or bonds spend money faster due to the cost of interest deterring borrowing until the need arises. The third option to alter the velocity of transactions through pension fund investment is to invest in fixed or variable return financial assets. Fixed investment returns pay the same set interest at regular intervals providing a preset income for investors and overall price stability. There are three options available to control economic growth and aggregate price stability through a 'Pension Investment Fund Requirement' that determines where or how pension fund assets are invested. I term this 'Pension Fund Easing', as it is similar to Qualitative Easing. Qualitative Easing is a tool used by central banks to control the level of economic growth or overall prices for goods. The technique changes the funds held on a central bank's balance sheet to impact the level of demand in an economy by switching to more or less risky assets. Pension Fund Easing could be performed by setting a Requirement for the existing pension fund assets to be transferred into the appropriate investments or by investing the funds from new pension contributions into the appropriate investments needed to meet economic targets.
%% Most us state pension plans under perform, because they are overweight bonds+ a few states, like ILL pay out to much/too overweight benefits. But in usa so many people are overweight/life length is going down for those/virus kills more overweight people also...…………………………………………………………………………………...………………………………………………………………………………………………………………………………...