MEASURING AND EVALUATING THE INVESTMENT PERFORMANCE OF PENSION FUNDS

This article focuses on the impacts various performance of pension funds to the amount of lifetime pension in selected European countries. Comparison of the performance of pension funds is determined by means of the Sharpe ratio in the time period 2005 - 2013. This paper aims to identify and assess the impact of the Sharpe ratio on the payment of lifetime pensions in postproduction period. It is necessary to differentiate data of pension companies with conservative investments and more risky investments in the empirical analysis. This distribution is made in order to fulfillment of paper objectives. I identified the different influence of the Sharpe ratio for conservative and risky investments on lifetime pension. The results of pension funds from Visegrad countries demonstrate weak performance in comparison with Sweden, Switzerland and the Netherlands. Conclusion of the paper is focused on evaluation performance of pension funds with an emphasis on changes in the amount of the lifetime pensions paid out by Czech pension company. The results of the article identified the importance of measuring and evaluating the investment performance because increase of the nominal appreciation of 1 percentage point will cause a change of lifetime pension of 28 %. This is a substantial increase in pension for participants in postproduction period.