June 2024
07Jun

US. New Issue Brief: Time to Fix Underfunding of Public-Sector Pensions

Public-sector pensions are facing a significant underfunding crisis that has only worsened over the past 25 years despite periods of high-asset returns. This growing burden threatens the financial stability of municipal and state finances, potentially leading to higher taxes or severe cuts to retirees’ benefits and essential services if not addressed promptly. In a new Manhattan Institute issue brief, senior fellow Allison Schrager argues the current high-interest rate environment presents a unique opportunity to set public-sector pensions on a more sustainable path. Improper pension...

June 7, 2024
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07Jun

UK Pension Attention campaign refreshes comms support

The ABI and PLSA have selected Third City to oversee the ‘Pay Your Pension Some Attention’ campaign, after a competitive four-way pitch. The agency will be responsible for “injecting a fresh approach” into the annual campaign and driving greater engagement with pensions among the UK public. Backed by prominent pensions industry brands, the work will run from September to November this year. The ABI and PLSA have worked with financial PR agency Teamspirit for the past two years on the initiative. In 2022,...

June 7, 2024
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07Jun

Navigating the UAE’s updated pension regulations

The United Arab Emirates (UAE) has recently undergone a comprehensive reform of its legislative framework. It aims to address shifts in the work environment and align UAE relations with international best practices. The most recent and radical change to the pensions landscape is the implementation of a new pensions law, UAE Federal Decree Law No. 57 of 2023 (the 2023 Law). Discrepancy on effective date The 2023 Law was officially published on October 2, 2023. This legislation represents the most substantial...

June 7, 2024
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06Jun

US. Manager concentration dominates corporate retirement plans. How can smaller managers compete?

David O’Meara, senior director and head of defined contribution investment strategy at Willis Towers Watson, said that the scale of the largest managers has given them significant advantages in multiple areas. “There is a downward pressure on fees,” O’Meara said. “That includes the long-term trend of an increasing use of individual passive investment options and target-date funds, which the largest managers have always dominated in the market, as well as active strategies that have more operational scale and can reduce...

June 6, 2024
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06Jun

Beware of DB pension risk blind spots – What gets measured gets managed

It is often said that “What gets measured gets managed” and it is simple to find many examples, inside and outside of the pensions arena, where this adage applies. However, in some contexts, especially when measuring uncertain financial liabilities and risks, it is not merely “what” is measured that matters but also “how” it is measured that is important. Applying different principles to measurement can significantly influence the actions taken with the potential for material financial ramifications. One common measurement of...

June 6, 2024
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06Jun

Many Hongkongers must work past retirement age as they face US$300,000 shortfalls in their average pension savings: Schroders survey

The average Hongkonger faces a HK$2.4 million (US$300,000) gap between their expected post-retirement expenses and the money available in their pension funds, according to a survey released on Tuesday. As a result of the eye-watering shortfall, almost three quarters of people believe they will need to continue to work beyond the expected retirement age, according to the recent survey of 1,000 Mandatory Provident Fund (MPF) members carried out by Schroders. There is no official retirement age in Hong Kong, but most companies require staff to...

June 6, 2024
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06Jun

UK. Pension pot of £1.3m needed for comfortable early retirement

A pension pot of £1.3m is now required to fund a comfortable early retirement at 55-years-old, analysis from Interactive Investor has revealed. The findings come as industry rumours suggest a possible return of the pension lifetime allowance, which was formerly £1,073,100, ahead of the general election. New calculations by the investment platform found that for a comfortable retirement at 55-years-old, £1.3m is required with 2 per cent inflation factored in, if they retire in 2024. This is an extra £495,000 compared...

June 6, 2024
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05Jun

US. Now It Is About Protecting Healthy Funded Levels

Corporate defined benefit pension plan sponsors have a singular opportunity to evaluate if their plans are in a position to offload liabilities using pension risk transfer or allocate to strategies with less risk, including liability-driven investing, reviewing their options to best provide pension benefits to the participants to whom they were promised at the lowest cost for the company going forward. Separate Milliman and Principal Asset Management research on pension plan funding finds sponsors have room to now accelerate de-risking—as...

June 5, 2024
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05Jun

Low and Middle Income countries need $1.4 trillion annually for universal social protection: ILO

Universal social protection for low- and middle-income countries would require an additional $1.4 trillion per year, according to a working paper by the International Labour Organization (ILO). Among regions, Africa faces the most substantial challenge in achieving universal coverage for social protection. The ILO document provided global, regional and country-level estimates of the financing gap to achieve universal social protection, including universal access to five key social protection guarantees (that is, for children, persons with severe disabilities, mothers of newborns, older...

June 5, 2024
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05Jun

Expert panel: How transition investments can help institutional investors reach net zero

Driven by the net-zero pledge towards green investments, institutional investors are finding themselves uncomfortably wedged between a rock and a hard place. If they invest exclusively in green assets and earn lower returns than the broader stock market benchmark, as was the case in 2023 for environmental, social and governance funds, they’re criticized for underperforming. But if they invest a small portion of the portfolio in brown firms, investors face recrimination for greenwashing. Also rubbing salt into the wound is the...

June 5, 2024
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