March 2021
03Mar

South Africa. The battle for pension savings: Between secure retirement and survival

The retirement savings industry keenly follows Finance Minister Tito Mboweni's speech every year, if not for anything else, to advise savers how to maximise their tax benefits when tax rates and bracket adjustments are announced. The 2021 Budget speech, however, had a lot of game changers for the industry. The automatic enrolment of workers into retirement plans that the sector has long been advocating for, and the annuitisation of provident fund benefits – which has been delayed over and over...

March 3, 2021
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03Mar

US. Pandemic Prompts Many to Take More Notice of Retirement Plan

Major retirement plan recordkeepers have found that the COVID-19 pandemic prompted many Americans to take better stock of their retirement and emergency savings. Many even increased their 401(k) contributions, and only a small percentage took out a coronavirus-related distribution (CRD). TIAA found that more than three-quarters of participants in the plans it recordkeeps checked their account balance last year and 61% visited a provider website. This engagement, TIAA says, was likely driven by the dramatic volatility of the year. TIAA...

March 3, 2021
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02Mar

US. Pension Relief Plan in COVID-19 Stimulus Bill That Passes House

On Saturday, a measure to give troubled multiemployer pension plans assistance from the Pension Benefit Guaranty Corporation (PBGC) passed the House of Representatives, as part of a larger $1.9 trillion coronavirus relief package from President Joe Biden. Read also US. Stimulus Bill Freezes Retirement Plan Contribution Limits The federal stimulus package, which includes $1,400 checks for many Americans and increased funding for vaccines, also holds the Emergency Pension Plan Relief Act of 2021 (EPPRA), an update to the Butch Lewis Act....

March 2, 2021
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02Mar

Covid-19 Is Most Certainly A Retirement Story

By Teresa Ghilarducci The Covid-19 recession, like all recessions, threatens the wealth and retirement security of millions of workers. Job loss prompts people to stop saving, raid their nest eggs or go into debt by falling behind on their rent and mortgage payments. Most workers nearing retirement had insufficient retirement savings even before the recession, and many planned to delay retirement and work longer to save more. But the Covid-19 pandemic and recession made that hopeful plan to work longer...

March 2, 2021
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02Mar

South Africa proposes easing infrastructure limits for retirement plans

South Africa's National Treasury wants to make it easier for the country's retirement plans to invest in infrastructure. The Treasury proposed amendments to Regulation 28 of the country's Pension Funds Act, which reduces excessive and concentration risk to assets and limits the extent to which plans can invest in a particular asset or asset class. The proposed changes, which were made in response to calls for increased investment in infrastructure given the low economic growth environment in South Africa, would introduce...

March 2, 2021
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02Mar

Transitioning fixed-income portfolios to low-carbon assets

Asian asset owners, particularly pension funds and insurance companies, are in danger of losing massive amounts of the value of their assets unless they can transition their fixed-income portfolios to low-carbon assets on time to meet the targets set in the Paris climate agreement. Since fixed-income assets make up the bulk of their portfolios, these institutions must be able to transition their portfolios to achieve the target of limiting global warming to well below 2 degrees Celsius, preferably to 15°C,...

March 2, 2021
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02Mar

Canada. Pensions seek clear strategies, lower costs through in-house management

Canadian pension funds are shifting asset management in-house, new research from CIBC Mellon says, and managers want lower fees and greater transparency on funds managed externally. The survey of 50 pension managers last year found an average of 22% of assets managed in-house; that figure is expected to rise to 28% this year. Almost two-thirds of pensions said bringing asset management in-house allows for a clearer alignment of strategies with long-term objectives. More than half cited advantages such as having a...

March 2, 2021
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01Mar

‘Markets Are Wrong’: $2 Trillion of Pension Funds Skip Bond Rout

As interest-rate jitters supercharged a meltdown in the world’s biggest bond market, Sam Sicilia barely blinked. “The markets are wrong” about inflation expectations, said Sicilia, chief investment officer of the A$56 billion ($43 billion) Host-Plus Pty pension fund in Melbourne. “Deflationary forces are bigger. Interest rates are going to stay at effectively zero.” With governments around the globe still adding to trillions of dollars of stimulus to ride out the pandemic, pension fund managers who are trying to discern the long-term...

March 1, 2021
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01Mar

China’s aging population is a bigger challenge than its ‘one-child’ policy, economists say

China’s decades-old one-child policy gained renewed attention in the last few weeks, after authorities gave mixed signals on whether they were closer to abolishing limits on how many children people can have. Authorities have rolled back the controversial one-child policy in recent years to allow people to have two children. But economists say other changes are needed for boosting growth as births fall and China’s population rapidly ages. “There are two ways to address this. One way is to relax the...

March 1, 2021
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01Mar

UK. Pension risk settlements reached record high of over £54bn in 2020

The UK pension scheme risk settlement market hit a new record-high figure of over £54bn in 2020, and 2021 could be even bigger, according to analysis from Aon. The provider said it was possible to conclude that 2020 had broken the £52bn total achieved in 2019 now that all information on deals was available, while it cited “early indications” in its forecast that the new year could be worth even more. It also noted that the feat had been achieved despite...

March 1, 2021
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