August 2024
08Aug

Why UK pensions revamp can benefit from leaning into Australia’s model

In the wake of the UK government's “pot for life” pension proposal, industry experts are drawing lessons from Australia's superannuation system. The proposal, reaffirmed in the 2024 Spring Budget, aims to simplify pension management, reduce costs, and improve retirement outcomes for British citizens. However, to successfully implement an Australian-style system, the UK would need to establish a robust payments infrastructure, implement regulatory reforms, and most likely launch a comprehensive consumer education program. A daunting task, but major reforms are necessary to create...

August 8, 2024
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08Aug

Industry reaction: VFM framework welcomed but risk concerns raised

The proposed Value for Money (VFM) framework for pension schemes has sparked positive reactions in the industry, as the joint approach turns focus away from cost and towards overall value, which includes service and investment performance. But some are concerned that the new rating system could oversimplify metrics, stifle innovation, and lead to standardised investment strategies that may limit savers’ benefits. LCP partner and head of DC Laura Myers says: “We have long advocated a change in emphasis from cost...

August 8, 2024
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07Aug

Why the informal sector has lagged in pension uptake

The blanket definition of a formal enterprise and the lack of succession structures such as family trusts have been cited as reasons behind the low participation in pension contributions among small businesses. The existence of well-formulated structures among larger entities and their compliance with tax obligations make them more attractive to financial institutions managing pension schemes, leaving out small businesses, which happen to be the largest employers. Edward Karani, Director of Infrastructure Development, Technology, and Innovation at the Micro and Small Enterprises Authority (MSEA), a...

August 7, 2024
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07Aug

From informal to formal: Angkas riders gain social security benefits

Angkas, a prominent ride-hailing service in the Philippines, has taken a significant step towards enhancing the welfare of its riders by signing an agreement with the Social Security System (SSS) to provide social security coverage to around 50,000 riders. This initiative, championed by Angkas, marks a monumental shift in how gig economy workers are perceived and treated within the formal economic structure. We extend our heartfelt thanks to Rolando Macasaet, president and CEO of SSS, for his unwavering support...

August 7, 2024
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07Aug

Economist’s cost transparency intervention triggers backlash in Switzerland

Industry representatives have slammed new analysis claiming higher costs incurred by Swiss Pensionskassen just a month-and-a-half before a referendum on occupational pensions reform. Discussions erupted after Rudolf Strahm, an economist, former politician and former cost supervisor, presented upwards-revised figures for administrative and asset management costs of Swiss pension funds in an article published by the Aargauer Zeitung. According to Strahm, CHF8.6bn (€9.2bn), or an average of CHF1,500 per year and per member, go to finance costs of pension funds. This is CHF1.5bn...

August 7, 2024
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07Aug

Occupational pensions reform: a complex vote on September 22

The occupational pensions reform affects the pension fund. The pension fund is the part of the Swiss pensions system to which employees and their employers make a monthly pension contribution. The German abbreviation, BVG, refers to the Federal Law on Occupational Old-Age, Survivors’ and Disability Benefit Plans. The occupational pensions reform is one of the more complex proposals that have recently been put to the vote. One reason for this is that there are well over 1,000 pension funds operating...

August 7, 2024
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06Aug

GPSSA launches campaign to boost proactive financial planning

The General Pension and Social Security Authority (GPSSA) has launched a new media campaign under the slogan "Plan – Save – Invest" as part of its "Proactive Financial Planning" project. The campaign aims to promote awareness of proactive financial planning as part of the UAE government's transformative "We the UAE 2031" initiative, which seeks to position the UAE as one of the world's most prosperous countries within the next decade. Throughout the campaign, the GPSSA aims to boost financial literacy by...

August 6, 2024
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06Aug

South Africa’s two-pot retirement threat

South Africa has a dismal savings rate, with more money flowing out of retirement vehicles than being put in—and the Reserve Bank warns there is a slight chance the new two-pot retirement system will exacerbate the problem. According to the latest 10X Investments Retirement Reality Report 2023, only 6% of South Africans are on track to retire comfortably. A comfortable retirement means being able to afford 70% of your pre-retirement income during retirement. The report is based on findings from the 2023...

August 6, 2024
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06Aug

UK. 170,000 retirees living abroad have had their state pensions frozen since 2003

Around 170,000 retirees living across the world have had their state pensions frozen without an increase for at least 20 years, data obtained by i show. State pensioners living in the UK see their pension increased each year by the triple lock policy – which sees pensions go up in line with inflation, average wage growth or 2.5 per cent (whichever is highest) – but this does not happen for those living overseas unless they are living in a country which has a reciprocal agreement with the UK. It means British pensioners living...

August 6, 2024
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06Aug

Labour should increase pension contributions to get the UK economy going again

In the first few weeks in office Labour has announced a number of different policies that Rachel Reeves hopes will get the British economy firing on all cylinders again. One policy that has received less attention – a review into pension adequacy – suggests that important changes might be on the way, changes which would support the Chancellor’s ambition to create a high investment economy. The big question for this review will be whether auto-enrolment pension contributions should be increased. Currently, the minimum...

August 6, 2024
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