September 2020

14Sep

S. Korea’s state pensions to face steep shortfall in 20 yrs: report

South Korea’s state-managed pension and insurance funds may dry up earlier than expected, suggesting the need of dramatic changes to cope with demographic trends and funding shortfalls in the foreseeable future, a government report projected. According to the fiscal outlook report for 2020-2060 by the Ministry of Economy and Finance, state-run National Pension Service, the world’s third largest pension fund, is estimated to return to a net loss by 2040 if conditions remain unchanged from now. The analysis projects...

September 14, 2020
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14Sep

UK. Credit downgrades present ‘serious challenges’ for pension schemes – AXA IM

A fall in the average credit quality of fixed income indices and increased competition for high-quality assets presents “serious challenges” for pension schemes, AXA Investment Managers (IM) has warned. Since the beginning of the Covid-19 pandemic, rating agencies have down graded over £778bn of corporate issues across global indices, leaving high quality assets in “short supply” during a period of rising demand. AXA IM Buy and Maintain credit team portfolio manager, Simon Baxter, stated that the concentration in high grade...

September 14, 2020
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14Sep

US. How the Secure Act Could Affect Retirement Savers

In December 2019, the federal government passed into law a set of reforms designed to help Americans achieve retirement security The legislation—known as the Secure Act—broadens access to tax-advantaged retirement-savings accounts and lets Americans keep money in such accounts longer, among other things. In recent months, worries about Americans’ retirement security have been heightened by the coronavirus pandemic. The mass unemployment caused by Covid-19 is a reminder of why people need retirement savings in the first place. So how...

September 14, 2020
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14Sep

Exploring the health-wealth connection

The song “God Part II” on the album “Rattle and Hum” by U2 has the lyrics: “The rich get healthy, while the sick stay poor.” Bono sung those words in 1988. Since then, a number of researchers have tackled what exactly is the link between wealth and health, and why. At first glance, one would expect a simple explanation: people with more money live longer. Clearly such a relationship cannot be strictly linear, as people don’t fall dead if...

September 14, 2020
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14Sep

Australia. Compulsory super saves taxpayer billions: New report reveals

A combination of the super guarantee supplemented with a means tested Age Pension incurs a significantly lower budget cost than providing a similar retirement income via a more generous publicly funded age pension, new independent analysis by Rice Warner Actuaries shows. The Rice Warner report found the Superannuation Guarantee will save the budget $17 billion this year, rising to $100 billion, (in current dollars) by 2058. The new report, commissioned by Industry Super Australia, assesses various policy scenarios using...

September 14, 2020
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11Sep

One of Sweden’s Biggest Investors Starts ESG Pressure Campaign

Alecta, a Swedish pension fund with about $110 billion under management, wants to take active investing to a new level to force the companies it owns to be more ethical. Carina Silberg, who runs a newly merged corporate governance and sustainability unit at Alecta, says her team is bringing in reams of data to figure out exactly what portfolio companies are doing when it comes to environmental, social and governance standards. If “large gaps” are identified, “targeted action” follows, she...

September 11, 2020
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11Sep

US. The crisis of multiemployer pension plans: Where do we go from here?

It is no secret that many multiemployer pension plans are struggling – paying out substantially more in benefits to retirees than the income they are receiving. Without legislative action, many are expected to go bankrupt in the next 5 to 15 years, leaving current retirees and active employees without the retirement income they expected. To understand where we go from here, let’s first explore the history of multiemployer plans, then look at potential avenues for reform. How...

September 11, 2020
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11Sep

UK:Workers ‘more at risk’ as they want to work past retirement date

A global retirement survey conducted in 15 countries by Aegon has revealed that workers in Britain could be exposed to lifestyle-changing financial risk later in life as a result of the COVID-19 pandemic. According to the survey, workers in the UK are less likely to want to retire earlier than planned but almost a third of them have no back-up plan in case they are unable to do so due to ill health. Only about 30% have a...

September 11, 2020
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10Sep

Spanish Government looking at incentives for delaying retirement

The Spanish Government is looking at providing incentives for those who carry on working after the age of 65 while taking steps to stop high earners from taking early retirement. Read also Greece.Pay as you go for auxiliary pensions In his appearance on Wednesday before the Toledo Pact parliamentary commission, Inclusion and Social Security minister Jose Luis Escriva said his department’s intention is to encourage people to delay their retirement. through a redesign of the extra payments for those who...

September 10, 2020
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10Sep

South Africa. There’s a pensions train smash coming: Magnus Heystek

South Africa is facing a ‘pensions train smash’, says Magnus Heystek, director of Brenthurst Wealth Management, as a number of factors including the poor JSE, a weak economy and new regulations are set to collide. Heystek said in a webinar on Wednesday (9 September), that this collision course is the result of a number of problems in the wider pensions industry which have been building for years. He added that ordinary South Africans are starting to see the problems...

September 10, 2020
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