July 2019

22Jul

U.K. keeps pressure steady on poorly governed plans

Defined contribution master trusts in the U.K. could see an additional boost in assets as the U.K. Pensions Regulator pressures single-employer plans to step up their governance and investment oversight. The Pensions Regulator has been on a mission to weed out poorly governed defined contribution plans in the U.K. for quite some time. After asking master trusts, also called multiemployer DC plans, to obtain new operating permissions to stay in the market, the number of DC master trusts was...

July 22, 2019
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22Jul

Japan faces long-term challenges despite ruling parties’ election success

The third House of Councillors election since the launch of the second administration of Prime Minister Shinzo Abe has ended. And while Abe's Liberal Democratic Party (LDP) has fewer seats in the upper house than it did before the election, the ruling LDP and its junior coalition partner Komeito managed to maintain the majority in the chamber. One could say that voters indicated a certain measure of support for the long-term administration, which has been in power for 6...

July 22, 2019
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22Jul

China to walk fine line between sustaining growth, pension system

China is attempting to walk a fine line between lowering corporate burdens to boost economic growth and making the country's pension scheme more sustainable amid an aging population. In its latest step, the government vowed to roll out a nationwide pilot program announced in 2017 that transfers stakes in state-owned firms to social security funds. This comes as the 2-trillion-yuan (about 291.55 billion U.S. dollars) reduction of tax burdens and social insurance contributions of enterprises helped lower corporate burdens...

July 22, 2019
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19Jul

Macron to trigger French pensioners crisis as he calls for French to work more

The reform is potentially explosive, with unions having traditionally sent millions of people onto the streets to protest against previous changes to pensions. Mr Macron has been hit by wave after wave of angry, and often violent, protests in the past year. Beginning last November, Gilets Jaunes protestors have shut down major French cities in protest over tax reform and other deeper issues in the country, such as class division. Read more @Express

July 19, 2019
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19Jul

Retirement Readiness From a Global Perspective

In the United States, the average deferral rate in defined contribution (DC) retirement plans is 8.6%. American workers with access to such plans have saved and invested substantial assets for retirement, many of them utilizing the help of expert financial advisers. Reports show the mean 401(k) account balance has soured 466% in the last 10 years. But how do these figures compare to other nations? Are there takeaways advisers and investors can derive from studying the saving/investing behaviors of...

July 19, 2019
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19Jul

Brazil’s Lower House Delays Pension Reform Vote, Irking Investors

Brazil’s lower house has delayed its second vote on pension reform, and the Senate is already dragging out its first of two votes, creating investor woes as the stock market dipped. Things were looking good last week as the Chamber of Deputies approved the overhaul in its first of two voting rounds with expectations that lawmakers would conclude their task before the house broke for its July 18-31 recess. But too many deputies took vacation early, so the lawmakers...

July 19, 2019
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19Jul

Risk-aversion among pension schemes a recipe for poverty

It is a known fact that pension funds, in their quest to deliver returns that will maintain pre-retirement standard of living for retirees, are faced with trilemma in their asset allocation—namely profitability, liquidity and security. Profitability is all about investing to achieve highest returns, liquidity rotates around the ability to answer to liabilities as at and when they fall due and security entails capital preservation. In other words, it is a risk-reward balancing act. However, there is also a...

July 19, 2019
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19Jul

Africa. Why Rotich locked up Sh385bn pension cash for workers below 50 years

The Retirement Benefits Authority (RBA) has come out to defend a legal amendment that will see more than Sh385 billion of workers’ pension savings made inaccessible to those below 50 years. Treasury Secretary Henry Rotich has, through a legal notice, amended pension rules effectively cutting out workers’ access to their employers’ portion of savings before clocking the official retirement age of 50. “Regulation 19 of the Principal Regulations is amended in paragraph (5) by deleting the words “and fifty...

July 19, 2019
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18Jul

You’d Be Better Off Just Blowing Your Money: Why Retirement Planning Is Doomed

I know this is a bold, and possibly controversial title, but retirement planning is broken and leaving people broke.   The destructive narrative is, “work hard, save money in a retirement plan, wait and it will all work out in the long run.” The reality is, without the ingredients of responsibility and accountability, there is no easy solution for retirement. Meaning, if we just work hard and set money aside, we are putting money into a market we have no control over.  The...

July 18, 2019
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18Jul

South Africa. Threat to SA’s R4 trillion retirement savings pot highlighted

The Institute of Race Relations (IRR) says in a statement it will be delivering a memorandum to the Association for Savings and Investment South Africa (ASISA) in Rosebank. The memorandum will highlight the “real threat to South Africa’s R4 trillion retirement savings pot”. “The governing African National Congress (ANC) has for some time discussed the possibility that the savings of ordinary South Africans could be prescribed – invested in areas or sectors ‘prescribed’ by the government. As recently as last month, minister...

July 18, 2019
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