August 2024

UK. Britain should raise pension contributions to plug ‘gender gap’, consultant Mercer says

 The minimum amount that workers and employers in Britain put into pension pots should be raised to help plug a retirement cash gap between men and women, and boost investment in productive assets, pensions consultant Mercer said on Wednesday. Britain's new Labour government has announced a review of the pensions industry to give people more value and create bigger cash piles to invest in infrastructure and green technology to raise returns and economic growth. The government should consider increasing - in stages - the minimum...

South Korea’s Yoon pledges urgent reform of $860 billion public pension fund

 South Korean President Yoon Suk Yeol on Thursday pledged urgent reform of the national pension fund, one of the world's largest with $860 billion of assets, to make it more equitable and to ensure income security for an ageing population. Yoon said there had been a loss of confidence in the pension system across generations and there was a need for fundamental and sustainable reform to restore the trust of those who needed it in retirement. "Now is the time to...

Gig economy is failing workers and needs urgent reform

In the recently released Chinese film Upstream, middle-aged lead Gao Zhilei, played by Xu Zheng, signs up as a food delivery driver to support his family after losing his white-collar job. Gao’s predicament is mirrored across the global working landscape where gig work has become a cost-effective way to fill temporary positions. The bulk of the work is in the food delivery, ride-hailing and home service sectors – a result of the emergence of app-driven, platform business models. But areas such as information...

UK. DC retirement expectations improve following state pension increase

The expected future living standard in retirement provided by defined contribution (DC) savings improved in Q2, although it is yet to return to the level reached before the 2023 update to the Retirement Living Standards, Aon's UK DC pension tracker has revealed. Aon's DC tracker rose “steeply” from 60 to 65.2 during the quarter, driven primarily by the April 2024 increase in the state pension, together with increases in post-retirement expected investment returns. According to the tracker, all members benefited from...

The geopolitical ripple effect of Asia’s ageing population

By 2050, according to the Asian Development Bank (ADB), one in four people in Asia will be aged over 60. This is a threefold increase compared to 2010. China, the economic powerhouse of the region, is projected to see a decrease of 220 million working-age individuals between 2011 and 2050. Japan’s population is expected to decline by 16 per cent by 2050, with the number of senior citizens living alone predicted to jump by 47 per cent. This demographic shift has far-reaching implications that demand the immediate...

US. Wealthier workers benefit most from retirement savings ‘nudges’

In the U.S. and U.K. alike, there is growing concern that people aren’t saving enough for retirement. In the U.S. specifically, around 20% of adults age 50 or over report having nothing saved for retirement, according to a recent AARP survey. Nudging behaviors — such as automatic enrollment or auto-escalation in a 401(k) plan — have historically been popular among policymakers to get people to save. However, there has been little investigation into how people adjust their spending patterns when more money is taken...

Finland pension funds consider divesting from logging firm after environmental violations

Finnish pension funds including Varma and Elo, both based in Helsinki, are considering divesting from forestry firm Stora Enso with the company being accused of sexism and environmental crimes in the country’s northern region of Suomussalmi, according to an emailed comment to Pensions & Investments. On Aug. 15, logging machinery belonging to Stora Enso was repeatedly driven over a shallow river within a forest in Suomussalmi, and in doing so killed thousands of endangered freshwater pearl mussels, as reported by Finnish public broadcasting...

US. How Are Employees Responding to State-Run Retirement Plans?

Practice Management State-run auto-IRA plans affect private-sector employers but are most of all intended to benefit their employees. How are those employees responding to them? Overall Positive Effects There is research indicating that these plans, in which employers are required register if they do not already offer retirement coverage to their employees, have a variety of positive effects. A number of researchers report that state auto-IRA programs increase coverage by serving as a catalyst to private-sector employers to establish plans of their own. In the...

UK. Reeves could raise £10bn a year by reducing pension tax relief, report says

Rachel Reeves could raise at least £10bn a year through a radical shake-up of pensions that would make tax relief less generous to better-off earners, a leading left-of-centre thinktank has said. The report by the Fabian Society says tax breaks for pensions have become markedly more expensive for the government and its proposed changes would fill half the £22bn shortfall the chancellor has identified in the public finances. Reeves has dropped strong hints that she is planning a tough, tax-raising budget on...

China pilots housing pension system to enhance people’s living quality

China is piloting a housing pension system in 22 cities including Shanghai, which aims to better facilitate existing housing upgrade and enhance people's housing quality and living environment, the China Securities Journal has reported. In China, home buyers have been paying a "housing maintenance fund" since 1998, which covers maintenance on residential buildings. However, just like humans, housing can get old and sick. By the end of 2022, the proportion of homes in urban areas that were built over 30 years...