| Pension Funds are divided
in two kinds:
For LUZ-EF, increase and preservation of capital are synonymous
of a Pension Fund sound financial management. This is a valid
statement specially for complementary Pension Plans.
To seek these goals in the most effective way LUZ-EF provides
consultancy for pricing, consolidation
of investments, evaluation and elaboration of management and
investment structure. For instance: the segregation
of the financial reserves in “to be granted” and
“granted” accounts, allows for adequate management
for defined contribution or a variable contribution plan.
Another example is the adaptation of the number of funds and
their classification, allowing for a better follow-up and
savings in administration fees.
In the Pension Funds business there are three types of plans:
Defined Benefit (DB), Defined Contribution (DC) and Variable
Contribution (VC). LUZ-EF offers models and structures for
all of them: elaboration of investment profiles in the case
of plans DC and stochastic multi-period ALM
based management model for all the cases are some examples.
This proprietary model, developed by LUZ-EF’s R&D,
extends the efficient frontier model developed by Harry Markowitz
– awarded the 1990 Nobel Prize in Economy.
Aiming at transparency and risks, the management techniques
define an investment policy,
starting from the objectives established by the HR guidelines.
Each Pension Fund has its own characteristics; all of them
rely on quality standards and most of the time on third party
Asset Managers. The process of managers'
selection accomplished by LUZ-EF guarantees a technical
choice, based on quantitative and qualitative criteria. The
choice should always be adapted to the demands of each company.
LUZ-EF has not neglected the follow-up
management developed by the company and it provides
to the entities modern concepts in assisting the dynamics
of the finance market, the policies of HR, as well as to the
legal needs.
Consultancy:
- Evaluation and definition of management model, investments
structure and benefits plans (HR);
- Elaboration and revision of investments policies;
- Structuring and documentation of financial processes;
- Management follow-up:
• Managerial and Fiscal Council Reports;
• Follow-up Meetings with managers;
• Documentation of the management process;
- Legal reports: Investments' Demonstrative (DI) and Tracking
Error (DNP).
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