December 2021
16Dec

US. Record Returns Not Enough to Ensure Public Pension Stability

Despite logging average returns of 27.5% during fiscal year 2021, state pension plans still face a large funding shortfall and might have billions more in unfunded liabilities not yet recognized on their books, according to a recent report from nonprofit Equable Institute. “This past year has been an incredibly helpful boost to state pension funds that spent a decade mired in mediocrity,” Equable Institute Executive Director Anthony Randazzo said in a statement. “But even a nearly $400 billion improvement in...

December 16, 2021
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16Dec

UK. WPC launches inquiry into saving for later life

The Work and Pensions Committee (WPC) has launched the third and final part of its inquiry into the impact of the pension freedoms and protection of savers, focusing on what needs to be done to help people plan and save for retirement. The inquiry, which will be hearing evidence until 2 February 2022, will consider whether households have adequate pension savings and how the government can improve member outcomes. In particular, it will consider issues around auto-enrolment, retirement income targets and...

December 16, 2021
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16Dec

UK. 48% of retirees worried about pension adequacy

Almost half (48 per cent) of retirees are worried that they may eventually run out of money in retirement, yet 41 per cent have no plan as to how much they should be spending each year to avoid this issue, research from Abrdn has revealed. The survey showed that 24 per cent of retirees, around 3 million Brits, were expecting to boost their savings with inheritance, whilst 33 per cent, equal to around 4 million retirees, plan to downsize to...

December 16, 2021
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16Dec

Aegon strikes deal with RGA to reinsure longevity risk in pensions

Aegon, the Dutch insurer, said on Wednesday it has struck a deal with Reinsurance Group of America (RGA) to hedge the risk that people in its Dutch pensions business will live longer than expected. The move "improves the risk profile of this business and is another step to generate stable, regular, and reliable cash flows," said CEO Lard Friese in a statement. Aegon said under the deal "initially" it would sacrifice 40 million euros ($45 million) in operating capital generation at...

December 16, 2021
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15Dec

UK. Pension risk settlement market set to pass £45bn by end of 2021

The UK pension risk settlement market is expected to exceed £45bn by the end of 2021, representing the third year in a row that activity has reached this level, according to analysis from Aon. The firm explained that whilst the market was “relatively subdued” in the first half of 2021, with £7.7bn of bulk annuity deals completed, the pace has since accelerated. As a result, Aon predicted that there will be close to £30bn of bulk annuity deals completed by the...

December 15, 2021
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15Dec

Retirement trends: Customizing planning post-pandemic

Retirement may seem like table stakes in the benefits landscape, but we’ve entered a new era where many employees are thinking about their retirement plans differently. Just 62% of workers are confident they will have enough put away to retire, according to the Employee Benefit Research Institute. And recent Morgan Stanley and SHRM research in Sept. 2021 found there are three top fears around retirement: Not having enough saved, outliving retirement savings, or losing it all in a down market....

December 15, 2021
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14Dec

IMF warns that Chile’s $173bn pension industry is at risk

A joint investigation by the International Monetary Fund (IMF) and the World Bank has found that Chile’s AFP pension fund industry is facing long-term structural issues as a result of a policy allowing pensioners to withdraw large portions of cash from their accounts. The Financial Sector Stability Assessment conducted by the global financial institutions found that the AFP system was ‘under threat due in part to a series of withdrawals’, and its executive board recommended that continued withdrawals and life...

December 14, 2021
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14Dec

US. Support builds for reversing Trump’s limits on ESG investing

A Department of Labor rule that would make it easier for retirement plan sponsors to account for social and environmental risks is garnering support from environmentalists and the financial services industry. The agency announced plans in October to roll back two rules adopted by the Trump administration that placed additional scrutiny on “sustainable investments.” The Trump-era rules did so by making it more complicated for 401(k) and pension plan managers to consider climate change and related issues when investing on...

December 14, 2021
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14Dec

EU. EIOPA highlights key risks for the insurance and pension sectors

The European Insurance and Occupational Pensions Authority (EIOPA) published today its December 2021 Financial Stability Report. The analysis underpinning the report examined key macroeconomic developments and the prevalence of risks that are key for the insurance and pension sectors. On the macroeconomic side, the COVID-19 pandemic continues to pose a challenge to European economies. Uncertainties relating to the path of the pandemic and supply chain disruptions weigh on the growth outlook. Despite the recent pick-up in long-term yields, markets still operate...

December 14, 2021
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14Dec

Japan’s Lesson for the World: Robots Won’t Save Us

Japan affords a preview of what the future of the United States, Australia, and Western Europe will become unless meaningful steps are taken to ensure that a nation’s relevance is measured by how it creates lives of dignity for its citizenry. But seeing this relevance has become difficult as much of the luster has gone from Japan studies. Wistful comments about heady days during the 1980s, when scholars of Japan were in demand, are still heard. But China now...

December 14, 2021
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