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The Geography of Pension Liabilities and Fund Governance in the United States

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  • Ashby H B Monk

    (Oxford University Centre for the Environment, University of Oxford, South Parks Road, Oxford OX1 3QY, England)

Abstract

If finance is the engine driving economic and geographic change, then pensions are its primary vehicle. On the one hand, pension-plan assets, which approached US$18 trillion in 2005 for OECD countries, are having global impacts on financial markets. On the other hand, pension-plan liabilities, larger than the assets in nominal terms, are also having dramatic impacts on plan sponsors. If assets are not properly managed, pension liabilities can threaten the financial solvency of plan sponsors. Consequently, owing to the enormous and growing financial and political importance of pension plans, I contend that the procedures governing these institutions are of increasing importance for economic geographers. In this paper the effectiveness of the current governance system is tested through a widely subscribed ‘expert survey’. Then, the relationship between pension-fund governance and economic geography is demonstrated through case study. I conclude that the current governance model remains inadequate. Moreover, poor pension-fund governance, in addition to having an economic cost, is shown to have tangible geographic impacts.

Suggested Citation

  • Ashby H B Monk, 2009. "The Geography of Pension Liabilities and Fund Governance in the United States," Environment and Planning A, , vol. 41(4), pages 859-878, April.
    • Handle: RePEc:sae:envira:v:41:y:2009:i:4:p:859-878
    DOI: 10.1068/a40284
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    References listed on IDEAS

    as
    1. Daniel Dorn & Gur Huberman, 2005. "Talk and Action: What Individual Investors Say and What They Do," Review of Finance, Springer, vol. 9(4), pages 437-481, December.
    2. Michael Useem & Olivia S. Mitchell, "undated". "Holders of the Purse Strings: Governance and Performance of Public Retirement Systems," Pension Research Council Working Papers 2000-3, Wharton School Pension Research Council, University of Pennsylvania.
    3. Clark, Gordon, 2000. "Pension Fund Capitalism," OUP Catalogue, Oxford University Press, number 9780199240487.
    4. Morag I. Torrance, 2007. "The Power of Governance in Financial Relationships: Governing Tensions in Exotic Infrastructure Territory," Growth and Change, Wiley Blackwell, vol. 38(4), pages 671-695, December.
    5. Clark, Gordon L. & Caerlewy-Smith, Emiko & Marshall, John C., 2006. "Pension fund trustee competence: decision making in problems relevant to investment practice," Journal of Pension Economics and Finance, Cambridge University Press, vol. 5(1), pages 91-110, March.
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