August 2020

31Aug

India. PFRDA mulling launching minimum assured return-based pension scheme

The Pension Fund Regulatory and Development Authority (PFRDA) is working on a minimum assured return-based pension scheme, its Chairman Supratim Bandyopadhyay said. The pension authority is in talks with pension funds and actuarial firms to work out the modalities of the proposed scheme, he said. "Under the PFRDA Act, we have the mandate to launch a minimum assured return scheme. Under pension fund (PF) schemes, the funds that are managed are mark-to-market. So obviously there is some volatility and...

August 31, 2020
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31Aug

Irish pension money in equities reduced – report

Irish defined benefit pension schemes have reduced their equity allocations by almost a third in the past three years. Equity allocations for Irish defined benefit schemes fell to 27pc this year, compared to 39pc in 2017. This is according to the 2020 ‘European Asset Allocations’ report from Mercer. The report finds that allocations to fixed income investments like corporate bonds over the same period have risen to 50pc from 48pc. The allocation to assets like property, private equity and...

August 31, 2020
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31Aug

Korean pension funds cushion pandemic impact in H1

South Korea’s pension funds took positive returns in the first half of this year, as they managed to weather the impact of the novel coronavirus on financial markets across the globe, disclosures showed Monday. The National Pension Service, Korea’s largest public pension fund with 752.2 trillion won ($635.5 billion) assets under management, posted a 0.5 percent return Friday as its stock losses were offset by fixed-income assets and alternative investments. By asset classes, from January to June, NPS took...

August 31, 2020
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31Aug

US. The Contribution Conundrum For Underfunded Plans

Reduced PBGC variable rate premiums may make now an optimum time to contribute. Plan sponsors undertaking risk-transfer activities in underfunded plans should consider contributing additional assets to maintain funded status equivalence. For some plans, low borrowing rates may present an opportunity. At the end of March 2020, the CARES Act was signed into law. One impact of this legislation for defined benefit plan sponsors is that any contributions that were required during 2020, either quarterly contributions or those...

August 31, 2020
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28Aug

UK. The Department for Work and Pensions publishes consultation on pension climate risk

The Department for Work and Pensions (DWP) has published a consultation, setting out proposals for larger occupational pension schemes and authorised master trusts to publish their climate risk financial disclosures. The consultation, published 26 August 2020, recommends that trustees of large occupational pension schemes must have effective governance, strategy, risk management and accompanying metric targets, to manage climate risk and opportunities in the market from October 2021. The DWP has recommended that trustees calculate the carbon footprint of pension...

August 28, 2020
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28Aug

Canadian Pension Fund Sues Walmart over Alleged Role in Opioid Crisis

The Ontario Provincial Council of Carpenters’ Pension Trust Fund is suing retail giant Walmart Inc. in search of documents to investigate potential corporate misconduct and/or mismanagement by its board. The lawsuit said the “demands arise from a troubling set of facts concerning the company’s role in the opioid epidemic.” According to the lawsuit, Walmart “utterly lacked legally required controls designed to flag and stop the diversion of opioid prescriptions into illicit channels,” and it is “in direct violation of...

August 28, 2020
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28Aug

US. The Future for ESG Investing in Retirement Plans

The department of labor (DOL)’S proposed rule on environmental, social and governance (ESG) investment practices, published in June, intended to add clarity to years of obscure regulatory guidance. Instead, it’s created a layer of complexity among fiduciaries and has fueled more than 1,000 critical comments. The proposed regulation restates that plan sponsors in defined contribution (DC) plans cannot disregard financial approaches in an effort to pursue ESG-related considerations without violating their fiduciary duties under the Employee Retirement Income Security...

August 28, 2020
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27Aug

European pension funds increasingly take ESG into account – Mercer

An increasing percentage of European pension funds are now taking climate-change risk into account when it comes to investment allocations, with awareness of ESG-related risks also on the rise. Read also Greece. Wave of Pension Applications Swamp Overwhelmed Greek System Consultant Mercer's latest European asset allocation insights survey found that 54% of respondents actively consider the impact of climate change-related risks on their investments, up from 14% in a 2019 survey. Read also UK. Taking action on climate risk: improving...

August 27, 2020
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27Aug

UK ‘lifeboat’ scheme for company pensions at risk

A former minister has warned that the government’s “lifeboat” scheme for company pensions is at risk from a huge wave of corporate defaults which in extreme circumstances could result in a 10% cut to pensioner incomes. Read also UK. Why we’re largely a nation of ‘no clues’ on pensions The Pension Protection Fund is the “insurance policy” for millions of people in final salary-style company pension schemes, promising to pay out if the employer becomes insolvent. It is funded by...

August 27, 2020
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27Aug

South Africa. Govt won’t force pensions to be invested in infrastructure projects, says deputy fin minister

- Government does not intend to force pensions to be invested in certain assets, says Deputy Finance Minister David Masondo. - Amendments to regulation 28 of the Pension Funds Act is purely to broaden the scope of investments trustees of funds can consider, he said. - Masondo says trustees have a fiduciary duty to deliver better returns to members of funds. Government has no intention of forcing pension funds to invest in specified projects or assets which...

August 27, 2020
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