November 2020

27Nov

Fintechs and Financial Inclusion. Looking past the hype and exploring their potential

By Gayatri Murthy, Maria Fernandez-Vidal, Xavier Faz, and Ruben Barreto (CGAP) Fintech companies combine technology with access to data to deliver new financial services and experiences to customers. They have been proliferating in emerging markets and developing economies (EMDEs), and some are creating solutions specifically for underserved, low-income, or remote customers. Yet for all the general excitement that fintechs have generated in the global development community, there is little information available about how specific fintech innovations solve pain points in...

November 27, 2020
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27Nov

Longevity Risk and Hedging Solutions

By Guy Coughlan, David P. Blake, Richard D. MacMinn, Andrew J. G. Cairns, Kevin Dowd Longevity risk – the risk of unanticipated increases in life expectancy – has only recently been recognized as a significant global risk that has materially raised the costs of providing pensions and annuities. We first discuss historical trends in the evolution of life expectancy and then analyze the hedging solutions that have been developed for managing longevity risk. One set of solutions has come...

November 27, 2020
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27Nov

Continuous-time Optimal Pension Indexing in Pay-as-You-Go Systems

By Oriol Roch Ageing population and economic crisis have placed pay-as-you-go pension systems in need of mechanisms to ensure its financial stability. In this paper, we consider optimal indexing of pensions as an instrument to cope with the financial imbalances typically found in these systems. Using dynamic programming techniques in a stochastic continuous-time framework, we compute the optimal pension index and portfolio strategy that best target indexing and liquidity objectives determined by the government. A numerical example is provided...

November 27, 2020
Articles, Pension design, ,
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27Nov

Pension and Health Services Utilization: Evidence from Social Pension Expansion in China

By Shanquan Chen, Xi Chen, Stephen Law, Henry Lucas, Shenlan Tang, Qian Long, Lei Xue and Zheng Wang The proportion of people aged 60 years or over is growing faster than other age groups. The well-being older adults depend heavily on their state of health. This study evaluates the effects of pensions on older adults' health service utilization, and estimates the size of pension required to influence such utilization. Using a nationally representative survey, the China Health and Retirement...

November 27, 2020
Articles, Pension design, System Sustainability, , , ,
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27Nov

U.K. clarifies timeline for reform of inflation measure

Investment consultants and the Pensions and Lifetime Savings Association welcomed clarity over the future use of the retail price index to calculate U.K pension benefits and liabilities, but warned that the change will still be detrimental to participants. Chancellor of the Exchequer Rishi Sunak announced Wednesday that the RPI calculation of inflation will be reformed to bring it into line with another measure of inflation — the consumer price index — starting in 2030 at the earliest. The change...

November 27, 2020
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27Nov

Five reasons to invest in pensions technology

The world has changed exponentially in 2020, leading many multinationals to ask valid questions about how they can enhance their global operations. As a significant expense for any business, pensions and benefits have come into the spotlight. Read also With more childcare and domestic work, the pandemic poses a ‘real danger’ to women’s progress, UN finds More than ever, the pressure is on for benefits teams to demonstrate that they are taking steps to minimise spend and avoid curbing...

November 27, 2020
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27Nov

With more childcare and domestic work, the pandemic poses a ‘real danger’ to women’s progress, UN finds

Since the onset of the coronavirus pandemic, women have been bearing the brunt of extra childcare duties and unpaid domestic work, a study by the United Nations (UN) has found. Women in a number of countries around the world have been spending around 31 hours on average a week on childcare, the study by the UN’s gender equality body, UN Women, found. This was an average 5.2 hours a week more than pre-pandemic time spent on childcare,...

November 27, 2020
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27Nov

UK. State pension rise will go ahead in 2021

State pensions will rise by 2.5 per cent next year, the government has announced. In her statutory annual review of benefit and State Pension rates, Therese Coffey, secretary of state for work and pensions, confirmed the state pension hike, in line with the government’s manifesto commitment not to tinker with the triple lock. The new rates will come into effect on April 12, 2021 and apply to the 2021/22 tax year. She said: “The Social Security (Up-rating of Benefits)...

November 27, 2020
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26Nov

In unprecedented move, Canadian pension funds unite to call for greater ESG standards

In an unprecedented move, some of Canada’s largest institutional investors have banded together to ask companies for more rigorous disclosures of environmental, social and governance factors, an effort they say is meant to promote more sustainable and inclusive economic growth. Read also Swedish pension giant and LGIM launch sustainable EM equity fund A group of eight pension funds, which together manage a total of about $1.6 trillion in assets, called on corporations in a joint statement Wednesday to standardize their...

November 26, 2020
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26Nov

UK. Millions face cut in value of workplace pensions

Millions of retirees will see the future value of their pension cut owing to a planned change in the way payments are calculated from 2030. Many of those with so-called defined benefit workplace pensions see their pension payments increase each year in line with the rising cost of living. Read also U.K. clarifies timeline for reform of inflation measure The way this annual rise is calculated is expected to become less generous from February 2030. Chancellor Rishi Sunak ruled out...

November 26, 2020
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