January 2024

3M to freeze U.S. pension plans

3M Co., St. Paul, Minn., will freeze its U.S. pension plans for nonunion employees at the end of 2028. The company said pension-eligible nonunion employees will accrue benefits until Dec. 31, 2028, according to a Jan. 8 news release. 3M had closed its primary U.S. pension plan to new hires effective Jan. 1, 2009. The change will affect employees at both 3M and Solventum, the healthcare company that is expected to spin off from 3M in the first half of 2024. "This...

The EU Loses About a Million Workers Per Year Due to Aging. Migration Official Urges Legal Options

The European Union’s top official for migration said Monday that member states will have to confront tough policy challenges — even in the current election year – to cope with the continent’s aging population. Ylva Johansson, the EU home affairs commissioner, said there was a pressing need to shift away from illegal migration and find more legitimate alternatives. “For demographic reasons, the population of working age in the EU will decrease by 1 million per year. It is decreasing by 1 million per...

UK. PM urged to suspend whip from pensions minister accused of misusing taxpayer funds

Calls have been made for the prime minister to suspend the whip from a minister while claims he used his taxpayer-funded constituency office to campaign for the Conservative party are reviewed. Paul Maynard, the pensions minister, has been referred to an investigator by the parliamentary expenses watchdog over reports that he charged taxpayers when producing political materials. The Sunday Times, which broke the story, also reported that the Blackpool North and Cleveleys MP claimed rent for an office that doubles up...

US. How the Gig Economy Is Reshaping Retirement Planning

As many as 50% of Americans have some sort of side gig, whether this is primarily how they make money, or in addition to a regular job. The gig economy, a phenomenon that may have emerged as a response to the high unemployment rates of the 2008-2009 recession, has become a part of American life, and it’s reshaping retirement. While these gigs offer workers more flexibility and variety, they may also come with some downsides, affecting how financially set people are for retirement. Some...

Romanian private pension funds’ assets up 31.4% y/y in 2023

Assets held by Romania's seven mandatory private pension funds in 2023 rose 31.4% to 126.7 billion lei ($27.87 billion) while the average yield climbed to a record high 17.94%, the industry's association said on Monday. The European Union member state overhauled its communist-era pension system in 2008, making it compulsory for working Romanians under 35 to contribute to a "second pillar" of private pension schemes as well as their state pension. Roughly 8.1 million Romanians contribute to the seven funds, which...

The Four Headwinds of Retirement and How to Combat Them

Dipping your toes in the fresh waters of an exotic beach. Enjoying a gorgeous sunset and your favorite drink as you relax on the back patio. Getting lost in a painting because you have all the time in the world to perfect every brushstroke. Spending more time with family and friends. These are the types of things you dream of indulging in when you retire. You don’t picture worrying about how much money you have in the bank or trying...

US. Expect familiar worries for 2024 as pension funds mull economy, interest rates

U.S. pension fund executives are taking a cautious approach to 2024, as they await the answer to how much the economy will slow and when and by how much the Federal Reserve may cut interest rates. While much remains unknown, they are seeking returns in places like fixed income and real estate, where they believe the greatest opportunities loom. There's also the matter of the upcoming U.S. presidential election. Christopher Ailman, chief investment officer of the $304.9 billion California State Teachers’ Retirement...

Pension Risk Transfer Growth Fuels UK Insurance Rating

The growing popularity of pension risk transfer deals is behind an “improving” label for the U.K.’s life insurance sector, according to Fitch Ratings. Higher interest rates have led to an increase in the funded status of U.K. pension funds, which in turn has led to an increase in PRT transactions as companies seek to offload their pension liabilities. The increase in PRT transactions is primarily responsible for Fitch’s optimism about the sector in the U.K.; the ratings agency identified a “neutral”...

Kenya. State lost Sh67bn in irregular pension payments, audit shows

What you need to know: Sh21 billion was paid to 29,387 claimants with shared bank accounts. Sh44.07 billion was irregularly paid to 221,590 claimants with irregular and no tax PIN. Sh1.62 billion paid in lump sum to 962 claimants before their exit dates from public service. The government lost at least Sh67 billion in irregular payments made by the National Treasury’s pensions department, a recent audit by the Auditor-General revealed. The amount paid to undeserving cases is sufficient to construct enough...

China too big to ignore, but policy will dictate growth, investors say

China's growth outlook remains murky but global investors can't afford to ignore the world's second-largest economy, although factors such as domestic policies, geopolitical developments and consumer sentiment will decide its growth trajectory, investment managers said. They also argue that upcoming restrictions by the U.S. and its partners on the flow of certain technologies to China has bifurcated the world scientific community and will hurt the global economy, even as some investors outside of the West, such as the Middle East,...