Modeling of Return on Pension Funds, Taking into Well-being of Older Generation

Abstract

The hypothesis that the well-being of the older generation can be improved by increasing the efficiency of pension savings investments into more profitable securities is proposed.A key factor, which increases the return on investment at a constant level of risk, is to diversify risk in the preparation of the portfolio. The well-being of older generations in terms of the need for optimum use of pension savings is considered. Four types of securities with different levels of risk and return, which theoretically can be invested pension funds are taken for analysis. Opportunities for investment securities in the simple and expanded portfolios are determined on the basis of existing legislation. Portfolios with different risk levels are compared. The principle of diversification is used. The curve of return and risk of various possible investment portfolios is simulated. The study is based on statistical methods.The opportunities for investing pension savings in securities with a higher level of profitability while maintaining a constant risk is demonstrated. The study focused on the revision of legislation in the field of investments of the pension funds of the Russian Federation in the stocks and bonds of Russian companies.