September 2024

South Korea. Gov’t seeks to raise pension premium rate to 13% of income

The government is seeking to gradually increase the pension premium rate from the current 9 percent of income to 13 percent and the pension's income replacement rate from 40 percent to 42 percent through a major reform designed to restore public trust in the fund’s sustainability, particularly among young people. The reform plan, announced on Wednesday by the Ministry of Health and Welfare, includes measures to enhance fairness among different age groups by increasing pension premiums more gradually for younger...

In brief: EU strikes investment facilitation deal with Angola

The European Union has struck a first-ever deal with Angola to stimulate foreign investments needed to achieve sustainable development goals. The EU-Angola Sustainable Investment Facilitation Agreement (SIFA) aims to boost Angola’s appeal to foreign investors by making investment regulations more transparent, promoting the use of e-government for authorisations, and enhancing stakeholder involvement. Angola made up 8% of the EU’s foreign direct investment in Africa, or €21.7bn, in 2022. It invested €2.9bn in the EU in the same year, making it the country’s main trade and investment...

US. The Economic Implications Of Aging Boomers And Emerging Millennials

More than 4 million Baby Boomers, born 1946-1964, are reaching 65 each year through 2027, and they are exiting the labor force in droves. Meanwhile, the core labor force is growing at a snail’s pace. Since 2000, the population of 25- to 54-year-olds has grown by only 7%. How the U.S. manages these converging demographic trends will be a monumental challenge in the years ahead. With an aging population, the government will face higher obligations for medical and Social Security costs. There will be fewer workers...

As life expectancy increases, Olivia S. Mitchell says it takes financial planning to take the worry out of extra retirement years

Career paths are rarely straight lines, but as new technologies transform jobs at a dizzying pace the twists and turns can throw retirement plans off course. Born to globe-trotting economist parents, Olivia S. Mitchell was introduced to economic principles early on. At the age of five, while living in Pakistan, she observed construction workers pouring concrete by bucket brigade rather than using a cement truck and asked her father why. “Labor is cheaper than capital,” he responded. Mitchell went...

Mexicanos “no aprovechan” opción de ahorro voluntario en Afore, según profesor del Tec de Monterrey

El ahorro voluntario en las Afores (Administradoras de Fondos para el Retiro) en México es una contribución adicional que los trabajadores pueden hacer a su cuenta individual, además de las aportaciones obligatorias. En 2024, estas aportaciones obligatorias equivalen al 6.5% del salario base de cotización, y se espera que para 2030 aumenten al 15% gracias a las reformas aprobadas en 2020. Estado Actual del Ahorro Voluntario A pesar de los beneficios del ahorro voluntario, este representa solo el 3.55% de todos los recursos administrados...

Argentina. Milei vetó reforma de pensiones aprobada por el Congreso debido al impacto fiscal que tendría la medida

El Presidente argentino Javier Milei vetó la ley aprobada por Congreso nacional que ajustaba las pensiones argumentando que afecta las cuentas públicas del Estado, según un decreto publicado en el Boletín Oficial en la madrugada de este lunes. Milei asumió el cargo en diciembre pasado y aplicó estrictas medidas de austeridad como parte de un intento para contener la inflación de tres dígitos, aunque la pobreza ha aumentado hasta perjudicar a la mitad de la población argentina. "La administración de los recursos públicos debe ser realizada en forma responsable y conforme a...

Pensión por invalidez en Colombia: Colpensiones tendrá que reconocerla en estos casos

La pensión por invalidez en Colombia se otorga a las personas que han perdido hasta el 50 % de su capacidad laboral. Colpensiones, en el marco de la norma vigente, también reconoce ese derecho. Sin embargo, y por una acción ante la Corte Constitucional, la entidad deberá entregar este beneficio en otras ocasiones. Dice la ley que la pensión por invalidez en Colombia debe entregarse cuando se han presentado todos los documentos y certificados que avalen la condición del aportante. De esta manera, en el país,...

Milei uses first presidential veto to overturn pensions increase

President Javier Milei has vetoed a pension increase approved by Congress in mid-August, his first use of the presidential power since taking office in December. He signed the veto on Friday night and it took effect on Monday after being published in the Official Gazette. The bill passed by Congress established a hike and guarantees to prevent retirees’ income from falling behind the basket of goods. In his decree overturning the increase, the president argued the bill was incompatible with the...

US. Fortune 500 pension plans shift $1B to bonds

Many pension managers are allotting more assets to long-term investment-grade corporate bonds, reported Standish Mellon Asset Management Co. LLC of Boston today. The firm, which is the fixed-income specialist for BNY Mellon Asset Management and a subsidiary of The Bank of New York Mellon Corp., said that 15 Fortune 500-company pension plans have added about $1 billion to their bond portfolios since January. Nearly half of the $1 billion is new money and the rest is re-allocated, said BNY...

Danish pension fund leaves Net-Zero Asset Owner Alliance

Danish pension fund PKA has withdrawn as a member of the Net-Zero Asset Owner Alliance (NZAOA), the fourth exit from the initiative and the first in more than a year, Responsible Investor can reveal. The €59.1 billion fund, which manages four pension plans within the social and healthcare sectors, joined the NZAOA in March 2021 and withdrew its support from the UN-backed group, which is part of the Glasgow Financial Alliance for Net Zero (GFANZ), on 31 August. A spokesperson for...