August 2020

11Aug

The Millennial Retirement Puzzle

Millennials now comprise the largest living demographic group in the U.S. Thanks to innovation and advances in technology, this first generation of digital natives has enjoyed opportunities that were unimaginable a few decades ago. Their demand for transparency, relevance and authenticity in the way they interact with service providers has been the driver of unprecedented change across industries, including — and perhaps especially — financial services. Read also Nearly half of young people have lost income due to the...

August 11, 2020
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11Aug

Switzerland. Pension reform initiative runs out of steam at early stage

The campaigners announced they had failed to collect the required minimum number of signatures and saw no chances of doing so by the deadline in early October. “Without any doubt I have been miscalculating a few things. The coronavirus did the rest for us,” said the main promoter of the initiative. Josef Bachmann said citizens were aware of the flaws in the current system, but under the restrictions imposed to fight the pandemic, it was much more difficult to...

August 11, 2020
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11Aug

US. Public Funds Lead Institutional Investment Rebound

Institutional plan sponsors posted a median plan return of 10.6% during the second quarter as markets rebounded from the COVID-19 pandemic-induced first quarter crash thanks to a strong performance by US equities, according to the Northern Trust Universe. The Northern Trust Universe tracks the performance of more than 320 large US institutional investment plans that have an aggregate asset value of more than $1 trillion. Public funds outperformed the other institutional segments tracked by Northern Trust, earning...

August 11, 2020
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10Aug

UK. Pension leaders file complaint over FCA ‘advice trap’

Pensions industry representatives have written a joint complaint to government ministers over new guidance from the Financial Conduct Authority, which they warn could see trustees deemed to be giving regulated financial advice. Read also UK. TPR responds to questions on their effectiveness on a pension scam case to WPC The Association of Consulting Actuaries, the Pensions Administration Standards Association, the Pensions Management Institute and the Society of Pension Professionals wrote to Guy Opperman, minister for pensions and financial inclusion, and...

August 10, 2020
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10Aug

Nigeria. Hope rises for annuity business

For more than 10 years, the National Insurance Commission (NAICOM) and the National Pension Commission (PenCom) struggled to find a common ground for the operation of life annuity business. A conflicting regulation between the duo caused various challenges of compliance. It came to a head in 2017, when both government agencies headed by the former Commissioner for Insurance, Mohammed Kari and Director-General, PenCom, Mrs. Chinelo Anohu-Amazu bickered, leading to the intervention of the former Minister of Finance, Mrs....

August 10, 2020
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10Aug

Multi-Manager For DC Plans: How To Hit The Sweet Spot, Even In Volatile Markets

How a multi-manager investment approach to defined-contribution plans can help support good decisions - and potentially great investment outcomes - amid difficult times. In markets like these, the value of a smooth ride of investment returns is easy to understand. The greatest responsibility of plan sponsors is to support the achievement of great investment outcomes. For the first time in years, the cycle of investor sentiment has turned decisively toward fear. The halting of economic activity precipitated by the...

August 10, 2020
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10Aug

US. California’s immense pension dilemma

California’s public employee pension dilemma boils down to this: The California Public Employees Retirement System has scarcely two-thirds of the money it needs to pay benefits that state and local governments have promised their workers. Moreover, CalPERS’ official estimate that it is 70.8% funded is based on an assumption of future investment earnings averaging 7% a year, which probably is at least one or two percentage points too high. In the 2019-20 fiscal year that ended June 30, CalPERS...

August 10, 2020
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07Aug

Defined Benefit Pension Schemes in the UK: Asset and Liability Management

By Philippe-N. Marcaillou The goal of Asset-Liability Management (ALM) of a Defined Benefit Pension Scheme (DB) is to properly manage the risks related to variation in its building blocks on both sides of the balance sheet whilst maintaining the same expected return. This book provides a step-by-step methodology to maximize the complete restructuring and monitoring of the ALM of DB schemes. It is a product of the author's 25 years of experience and technical knowledge in ALM of...

August 7, 2020
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07Aug

How Much to Save? Decision Costs and Retirement Plan Participation

By Jacob Goldin, Tatiana Alexandra Homonoff, Richard Patterson, Bill Skimmyhorn Deciding how much to save for retirement can be complicated. Drawing on a field experiment conducted with the Department of Defense, we study whether such complexity depresses participation in an employer-sponsored retirement saving plan. We find that simplifying one dimension of the enrollment decision, by highlighting a potential rate at which non-participants might contribute, increases participation in the plan. Similar communications that did not include a highlighted rate yield...

August 7, 2020
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07Aug

Are Dutch Old-Age Pensions Taxed Fairly and Efficiently?

By Bernd Genser, Robert Holzmann The Dutch pension system is internationally top-ranked as a well-designed three-pillar system. Moreover, almost all forms of pension benefits are expenditure taxed in line with the European Commission's recommendations. Consequently, the Dutch pension policy approach could be regarded as a welcome blueprint for pension policy reform, currently on the agenda of all EU member countries. This paper focuses on the taxation of Dutch pensions and identifies two classes of problems that challenge the suitability...

August 7, 2020
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