Inflation Hedging in Defined Contribution Pension plan by Investing in Tehran Stock-Exchange

Authors
Hoda Zobeiri
Mani Motameni
University of Mazandaran
10.29252/jemr.10.40.67
Abstract
Due to pension fund problems in Iran, the multi-pillar social insurance system has been released in 2017. According to this, the first pillar is regarding to low income groups and finance through the public fund. The second pillar is defined benefit and finance pay as you go. The third pillar is defined contribution and fully funded finance. Contributions are transferred to the individual account. The pension fund directors supposed to investments the accounts and to return the Contribution fund and its returns in retirement time. The main issue is that the old age pensions are not guaranteed in this plan and face with financial risk and inflation. Due to high inflation of Iran’s economy, the main challenge of third pillar plan is the inflation. This paper is main to inflation hedging in defined contribution pension plan by Investing in Tehran Stock-Exchange. By using NARDL model and 133 monthly data up to 2020 the results show that TSE index can hedge the inflation.
Keywords
Pension Fund
Iran
Stock-Exchange
Inflation
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