The Turnover Impact on Pension Funds’ Performance: Comparison Between Biographical and Systematic Effect
The main purpose of this paper is to study how Executive Directors’ Turnover impacts the performance of Pension Funds in the United States. The sample comprehends 104 US Funds, considering the two largest for each country, in a time frame that goes from 2005 to 2017. As dependent variable was used operating performance, chosen to consider both Pension Fund returns on investments and its size. The analysis examines two different biographical characteristics: level of Education and Prior Job Experiences. Subsequently, it compares and expands the models adding Different Reporting Months and Yearly Benchmark as a systematic variable. While nothing was found about Turnover Year, the paper finds that both Year Before and Year After Turnover impact the returns in a negative way suggesting that changing the management is not performance enhancing. In addition, it seems that reporting in June could have a positive impact on returns, suggesting in this way that Pension Funds that report in that month are biased. Finally, controlling for Public Role as Previous Job Experience could help to reduce the systematic effect of the crisis on Pension returns.