May 2020
11May

Australia. COVID-19 has killed 12% superannuation

For years MacroBusiness has argued that Australia’s superannuation guarantee (SG) should not be raised from the current level of 9.5% to 12%. Our arguments against lifting the SG centre around four key issues. First, superannuation concessions are grossly inequitable and favour high income earners. This inequity is illustrated clearly by the below Australian Treasury chart, which shows that the top 1% of earners will receive roughly 14-times the taxpayer contributions to their personal superannuation accounts as the bottom 10%...

May 11, 2020
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11May

Covid-19, Longevity Risk & the Economics of Annuitization

Although the dire medical situation and mounting economic toll of covid-19 is of immediate and first-order importance, the virus has also prompted many to ponder their own mortality. Whether it’s doctors in emergency rooms who quickly redrafted codicils or nursing home attendants pondering their own DNR instructions, the randomness or mortality is being imprinted on our susceptible behavioral minds. Interestingly, preliminary and anecdotal evidence suggests a spike in the acquisition of life insurance policies over the last few months,...

May 11, 2020
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08May

Pandemic Blots One Year’s Worth of Gains from Canadian Plans

The coronavirus pandemic has wiped about a year’s worth of gains from Canadian pension plans, BNY Mellon said Monday. Corporate, public, and university retirement funds lost a median 7.23% in the first quarter ending in March, according to the financial services firm. Over the past 12 months, marked by strong advances up until 2020, that represented a 1.13% loss. But pensions overall still gained about 7.24% annually over the past decade. Results from the report were drawn from...

May 8, 2020
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08May

Egypt increases wages, pensions by LE 100B in 20/21: Prime Minister

"Egypt’s new budget draft for fiscal year 2020/2021 includes an article stipulating the increase of wages and pensions by LE 100 billion," Prime Minister Mostafa Madbouli said Thursday. Madbouli added at a press conference at the headquarters of the Cabinet that the state was keen to alleviate the burden off the Egyptian citizen during the coronavirus crisis. “Every year we need nearly 800 jobs for young people,” he stated. “We all, as citizens, must be aware that delayed...

May 8, 2020
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08May

UK. FCA allowed uninsured adviser to finish nine DB transfers

The regulator allowed an adviser to complete nine defined benefit pension transfers at the end of last year despite the work being excluded from the firm's insurance. The advice firm notified the Financial Conduct Authority in August 2019 that it was unable to renew its professional indemnity insurance to cover defined benefit transfer activities, and was subsequently told to cease writing this type of business and transfer any pipeline clients to another adviser. The firm objected, instead asking...

May 8, 2020
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08May

US. J.P. Morgan report estimates pandemic’s impact on unfunded retirement benefits

Banking giant J.P. Morgan issued a report estimating the impact of the COVID-19 pandemic and economic downturn on states’ unfunded pension and retiree healthcare liabilities, noting Connecticut would have to pay nearly 40 percent of its revenue for the next thirty years to pay off nearly $70 billion in unfunded liabilities. Connecticut had the fourth highest cost to pay off its liabilities, with Hawaii, New Jersey and Illinois faring worse. According to the report, the economic downturn added another...

May 8, 2020
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07May

Staggering £19bn left languishing in unclaimed pension pots

Insurance association will work with UK government to ensure people ‘are reconnected’ with assets Many Brits are not contacting their pension provider when they move house. The Association of British Insurers (ABI) surveyed 2,000 UK adults and estimated that there are around 1.6 million pension pots worth £19.4bn ($24.2bn, €22.5bn) unclaimed. This is the equivalent of nearly £13,000 per pension pot. The survey comes several years after the government predicted that there could be as many as 50 million dormant and lost pensions by...

May 7, 2020
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07May

Swedish pension giant joins risk transfer market

Alecta, a Swedish pension fund manager, has announced it will be working alongside Dutch healthcare pension fund PGGM in the risk transfer market, taking 30% of deals PGGM invests in. PGGM is the largest single investor in significant risk transfer deals, growing a €5bn book which references €70bn of portfolios, and advocating to regulators and others for the benefits of the market.It is one of the only pension funds regularly active as a direct investor in... Read More @Global Capital

May 7, 2020
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07May

US. Public pension funds are a net gain for state and local revenue – study

Public pension funds were net revenue generators for state and local governments in 2018, surpassing taxpayer contributions by $179 billion, according to a biennial study released Tuesday by the National Conference on Public Employee Retirement Systems. That represents a 30.6% increase from the original study covering 2015-2016. In 2018, pension funds generated about $341.4 billion in state and local revenues through investments and retiree spending, while the taxpayer contribution to those pension plans was $162 billion. For 40 states,...

May 7, 2020
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07May

Four Clues To The Future Of Financial Services Firms And Fintech

As I write this, I can’t help thinking about what my ‘new normal’ looks like. The less than perfect moments involve me turning around and yelling at the dog to stop barking at the rare person who goes past our front door; he is both interrupter and sometimes star of my client video conferences. Obviously, my request is futile. According to a canine expert friend, my yelling sounds to the dog like a joyous bark and therefore encourages more...

May 7, 2020
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