December 2020

09Dec

Pension funds increasingly require ESG compliance; here’s why they should look to Africa

The Scottish Widows Fund recently announced that it will dump £440m of company holdings that fail its Environmental, Social, and Governance (ESG) tests. Being one of the most far-reaching exclusions policies adopted by a major UK pensions provider to date, it’s important to take note of this action. And as pension funds and asset managers across the world face increasing pressure to protect client portfolios from the risks of climate change, others will follow. Read also South Africa. Sustainability...

December 9, 2020
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09Dec

U.S. employers eyeing innovative features for defined contribution retirement plans, Willis Towers Watson survey finds

A majority of U.S. employers are eyeing innovative features for their defined contribution (DC) plans to boost their value, fortify retirement savings and enhance employees’ overall financial wellbeing, according to a survey by leading global advisory, broking and solutions company Willis Towers Watson. The survey also found employer interest in lifetime income options is accelerating as plan sponsors look for ways to help employees generate a steady flow of income in retirement. The 2020 U.S. Defined Contribution Plan Sponsor...

December 9, 2020
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09Dec

Is There a Place for ETFs in Retirement Plans?

Millennials favor exchange-traded funds (ETFs) more than other generations, according to a report by Charles Schwab about trends in retirement plan self-directed brokerage accounts (SDBAs). Millennials are a considerable portion of the U.S. workforce, The low cost of ETFs is often cited as a positive feature of the funds. Yet, even as retirement plan fees are driven down and have been the subject of much litigation, ETFs have not been widely accepted by defined contribution (DC) plan sponsors. Tom Skrobe,...

December 9, 2020
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09Dec

Kenya. Selling pension to millennials changing jobs

Like most African countries, Kenya boasts a youthful population of about 75.1 percent persons below 35 years (Kenya National Bureau of Statistics, 2019 census). However, pension uptake by this demographic has been low, yet the youth have the benefit of enjoying the power of compounded interest over a longer saving period. With unemployment rates in Kenya being at about 39.1 percent, most millennials live from hand to mouth and those employed are driven by consumption and peer pressure with little...

December 9, 2020
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08Dec

Covid-19 poses long-term threat to pension savings – OECD

The Covid-19 pandemic has increased the risk that people will not be able to save enough for their retirement, according to a new OECD study. Read also FinTech In The Time Of COVID: What Financial Services Companies Need To Know The economic impact of the crisis and the shutdowns that many countries have adopted in an effort to halt the spread of the virus has affected the ability of workers and their employers to contribute to private retirement plans, the...

December 8, 2020
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08Dec

The Consequences of Long-Term State Pension Underperformance

The financial health of state pension plans has worsened and advisors should avoid municipal bonds from certain issuers. Each year Cliffwater LLC prepares an annual report on the financial condition of state pension plans over time. This year’s report covers 66 state pension plans and almost $3 trillion in assets. Following is a summary of some of the key highlights of the report, which covers the 19 fiscal years ending June 2019: Following the great bull market of the...

December 8, 2020
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07Dec

For institutional investors, ETFs can make meeting liquidity needs easier

Liquidity is never far from the minds of institutional asset owners but the importance of having a comprehensive liquidity plan came into sharp relief during the pandemic-induced spike in market volatility earlier this year. When stock prices plummeted in February and March, the asset allocation of many institutional portfolios fell out of synch with policy benchmarks, with asset owners finding themselves significantly underweight equity and overweight fixed income. That would have been the perfect time to rebalance, but an...

December 7, 2020
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07Dec

Exxon Under Pressure From New Activist Fund

Exxon Mobil Corp. is facing the threat of a proxy fight from a newcomer activist investor with a sustainability bent that wants the beleaguered energy giant to act faster to remake itself. Engine No. 1 LLC, an investment firm launched by Chris James last week, is preparing to send a letter to Exxon ’s board urging the Irving, Texas-based company to focus more on investments in clean energy while cutting costs elsewhere to preserve its dividend. The letter, a...

December 7, 2020
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07Dec

Top 5 Banking And Fintech Trends For 2021

Observations from the fintech snark bank tank 2021: The Year of Value Chain Disruption I’ve never been a big fan of “Year of the [fill-in-the-blank]” proclamations. Google the term “year of the customer” and you’ll find that every year for the past 15 years has been heralded as the year of the customer. Hey, one year it might just really happen. And past claims of “disruption” in financial services have centered on changes at the customer interaction level—i.e., digital...

December 7, 2020
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04Dec

Chilean lawmakers approve second pensions withdrawal

Chilean lawmakers on Thursday gave final approval to a bill that allows citizens to make a second withdrawal from pension funds so they can cope with the economic havoc wreaked by the coronavirus pandemic. The bill, which passed its last legislative hurdle with a Senate vote late on Thursday, allows for another 10% withdrawal from Chile’s privately managed pension funds. The measure was introduced by conservative President Sebastian Pinera’s government two weeks ago to head off a more comprehensive...

December 4, 2020
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