September 2024

Working till your 70s — Japan’s prospective gift to the world

Japanese people are living longer, but with a struggling pension system and the highest inflation in decades, more are delaying retirement until their 70s or later to make ends meet. Michie Hino is one of them. She works at an elderly care home east of Tokyo, where she spends eight hours a day cleaning the facility and washing laundry even though she’s 77 years old herself. She’s part of the workforce supporting Japan’s growing ranks of aged and infirm. Her monthly...

US. Pressure Mounts on Public Pension Funds to Divest Chinese Investments

As the world revisits decades of globalization and diminishes the interdependence and integration of the world’s economies, and as interests of China and its allies become less aligned with the interests of the U.S., Europe and their blocs, many institutional investors are caught between generating alpha and legislators who want their states’ funds to be completely divested from the world’s second-largest economy. Geopolitical worries have led legislators in several states to mandate that their state pension funds divest from Chinese...

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...

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...

US. This Triple Tax-Advantaged Retirement Account Is Getting a Big Boost for 2025

The IRS doesn't always give away tax breaks for free. Often, there's some sort of catch involved. With a traditional IRA or 401(k) plan, for example, you get a tax break on the money you contribute. But in return, you're not allowed to access that money before age 59 1/2, and taking an early withdrawal generally results in an expensive 10% penalty. Health savings accounts, or HSAs, work similarly. While these accounts are loaded with tax breaks, there are strict rules you...