Pension funds across but also within countries show variation in terms of their scope, benefit calculation and investments. We argue that a) national regulation and b) the corporate governance of pension funds mediate the effects of financial crises and therefore explain largely the varying effect of financial crises and the varying responses of pension funds. For analytical clarity, we distinguish between two forms of financial crises: financial market crisis (equities as main financial vehicles) and sovereign debt crisis (bonds as main financial vehicles).
Based on theoretical considerations and the national regulation of pension funds as well as fund-specific corporate governance before the financial market crisis of 2007/08, the paper defines vulnerability profiles for selected pension funds in diverse countries. Afterwards, we analyse first their performances during the financial market crisis and more recently during the sovereign debt crisis. Second, we investigate their responses to these two financial crises with regard to the available menu of responses and the chosen strategies (changes in investments, contributions and benefit calculation, funding requirements, corporate governance).
