June 2019

28Jun

Canada. A new paradigm for pension plans

The single-employer pension plan model is dying. We do not need to mourn its demise, but we do need to replace it. In a recent report published by the C.D. Howe Institute, we promote the implementation of new private-sector pension plans in Canada based on a better governance model. Rather than being sponsored by single employers, the new plans would be sponsored by multiple employers and governed by independent management boards that include representation from all stakeholders. Scale is...

June 28, 2019
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28Jun

UK. Government denied pensions case appeal

The Supreme Court has today (June 27) refused the government’s application to appeal a court case which ruled changes made to judges and firefighters pension schemes were discriminatory. According to the Fire Brigades Union this was the last legal hurdle in the dispute, leaving the government with no further avenue to exhaust. Elizabeth Truss, chief secretary to HM Treasury, revealed in January that if the government lost it could cost around £4bn a year if extended to all applicable...

June 28, 2019
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27Jun

Portugal. Social security grants 26,000 early-retirement pensions

Very long contributive careers – of people who began working while still very young – accounted for more than half of the total early retirements being approved in 2018, with 26,389 pensions being granted, according to data unveiled by the minister, José Vieira da Silva, at a regular hearing of parliament’s committee on employment and social security. This year, the normal retirement age is 66 years and five months; at a lower age, early retirement may be requested for...

June 27, 2019
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27Jun

Brazilian real falls on economy worries, dollar lifts other Latam forex

The Brazilian real dipped on Tuesday on worries about the country's economy and pension reform plans, while other Latin American currencies rose against a weaker dollar. The Brazilian real edged lower for a second day, while the Mexican peso hovered near two-week lows even as the greenback touch new lows against a basket of major currencies. FRX/ Minutes from the Brazilian central bank's June policy meeting showed the economy is stagnating and uncertainty surrounding economic and fiscal reforms is...

June 27, 2019
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27Jun

The Disappearing DB Pension Plan

The use of defined benefit pension plans continues to decline as sponsors look to de-risk pension strategies. Governing a defined benefit (DB) pension plan and its investment strategy has always been challenging. Over the past decade it’s also become increasingly complex, not to mention costly, spurring many plan sponsors to reevaluate their pension plan approaches. A new survey of 155 U.S. senior finance executives conducted by CFO Research, in collaboration with Mercer, found that 77% of those DB plan...

June 27, 2019
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27Jun

UK. Ministers ‘sit on £7bn unclaimed benefits’ as pensioners suffer

More than one million pensioners are living in poverty while the Government hoards billions of pounds worth of benefits. Around £7billion of Pension Credits have gone unclaimed since 2017, meaning that some of the most vulnerable older people are missing out on around £49 a week. Experts predict the overall figure will rise to £17billion by 2022 – and from June 2020, over-75s will also find themselves without a free TV licence after the BBC's decision to offer the...

June 27, 2019
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27Jun

Japan’s workers scramble to make up $187,000 retirement shortfall

A panel report from Japan's financial regulator estimates that an average elderly couple will need an extra 20 million yen ($186,768) to fund a 30-year retirement. That has prompted retail investors, many still in their 20s, to start building up assets on their own. Nikkei surveyed major online brokerages about the changes they have seen since the report was released on June 3. From June 10 to 14, Rakuten Securities saw applications for the Nippon Individual Savings Account program...

June 27, 2019
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26Jun

Australia. The ‘average’ retiree is now self-funded

Australia has reached a major milestone, with most new retirees having enough savings to be self-funded rather than reliant on the age pension, new research shows. More than half of 66-year-olds were not accessing the age pension at December 2018 because their assets and income were too high, while 20 per cent were on a part pension. Only 25 per cent were drawing a full age pension. According to Jeremy Cooper, chairman of retirement income at Challenger who conducted...

June 26, 2019
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26Jun

S. African Pensions Seen at Risk If State Forces Investments

A plan mooted by South Africa’s ruling African National Congress to force retirement funds into investing in specific state-owned companies or government projects could leave pensioners poorer. The ANC in its election manifesto earlier this year said it would investigate using prescribed assets to help foster inclusive economic growth, fund social improvements and diversify the finance industry. A lack of detail as to how this could materialize since it was accepted at the party’s policy conference in 2017 has...

June 26, 2019
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26Jun

Japan. Abe survives no-trust vote over pension report scandal

The opposition bloc tabled the motion in Japan's National Diet just before the current parliamentary term was due to come to a close. Given the ample majority enjoyed by Abe's government in both of Japan's parliamentary chambers, the no-confidence vote was never expected to pass. Opposition parties moved against the head of government following a controversial government report earlier this month that underscored the unsustainability of the public pensions system and seemed to encourage private savings as a...

June 26, 2019
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