March 2019

27Mar

First Joint Venture gets go ahead to develop pension insurance business in China

China has given permission to a joint venture (JV) to establish a pension insurance company in the country, making it the first JV that has gained access to this sector. The JV, Heng An Standard Life, was formed in 2003 and is 50-50 owned by Scotland-headquartered Standard Life Aberdeen and Tianjin TEDA International at the end of 2018. The new entity will be the country's first foreign-funded pension insurance company, the China Banking and Insurance Regulatory Commission said Wednesday...

March 27, 2019
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27Mar

UK. How will new ‘collective’ pensions work? Royal Mail to pioneer a scheme that shares risks – but slashes income if things go wrong

The Government has approved a new type of 'collective' pension scheme, where workers share investment risks in the hope of gaining more certainty over payouts in retirement. Pensions won't be guaranteed - retirees could see their income rise or fall from year to year - which makes them insecure compared with traditional final salary pensions. But schemes will be designed to give stronger protections than modern defined contribution pensions, where individual workers bear all investment risks when building pensions...

March 27, 2019
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27Mar

EIOPA determines principles for transparent, timely and clear information provision on pensions

​In the context of the implementation of the IORP II Directive, the European Insurance and Occupational Pensions Authority (EIOPA) published today a second "Report on Other Information to be provided to Prospective and Current Members: Guidance and Principles based on Current Practices". This report complements EIOPA's first report "Implementation of IORP II: Report on the Pension Benefit Statement: guidance and principles based on current practices", published on 13 November 2018. It analyses national practices existing prior to the implementation...

March 27, 2019
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26Mar

UK Proposal Would Make Pension Mismanagement a Crime

Aproposal by the U.K. government to increase penalties and impose up to seven years in jail for bosses who recklessly risk pensions might prompt more employers to offer defined-contribution retirement plans instead of defined-benefits plans. "Overall, the proposal seems likely to make defined-benefits plans even more disfavored," said David Powell, an attorney with Groom Law Group in Washington, D.C. The proposed criminal offenses may make it more difficult for pension schemes to recruit trustees, he noted. If a plan...

March 26, 2019
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26Mar

How to De-risk a Pension Plan in 2019

Changes in interest rates, Pension Benefit Guaranty Corp. premiums, and mortality assumptions may affect plan sponsors’ decisions to de-risk (or not de-risk) defined benefit plan liabilities in 2019. Note that for purposes of this article, by “de-risking” we mean paying out a participant’s benefit as a lump sum and thereby eliminating the related liability. We illustrate our analysis of the effect of interest rates and PBGC premiums on the de-risking decision by using a (relatively simple) example: the cost-of-benefit...

March 26, 2019
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26Mar

UK. Over a million pensions face 55% tax timebomb

The pension pots of around 290,000 UK workers have already surpassed the Lifetime Allowance (LTA), meaning that they could face a hefty tax on any additional retirements savings. In addition to those already past the point of no return, research by mutual insurer Royal London has revealed that there are around 1.25 million people at risk of breaching the LTA by the time they retire. This is because senior and well-paid employees with defined benefit or defined contribution pension...

March 26, 2019
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25Mar

How Korean pension service can be saved

The South Korean National Pension Service (NPS) is the third-largest national pension fund in the world with US$560 billion in assets. It was founded in 1988 to ensure that all South Koreans after retirement would have a stable source of income. Currently, a certain amount of money is automatically deducted from the salaries of employees and employers as a contribution to the NPS by law. However, many Koreans worry that the NPS will run out of funds in the...

March 25, 2019
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25Mar

Namibia. N$700m pensioners money at risk

THE Government Institutions Pension Fund is suing the South African company, Steinhoff Holdings International, for possible losses of around N$700 million invested in the company since 2014. Steinhoff Holdings International is a global retailer with more than 40 brands in over 30 countries. Some of Steinhoff's outlets are Incredible Connection, Hifi Corp, Hertz Car Rental, Timbercity, Pep Stores, Dunns, Shoe City, Pennypinchers, Tekkie Town and Ackermans, among many others. The company was hit by a N$100 billion...

March 25, 2019
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25Mar

Canada. A long-term fund with $370 billion under management shares some investing ‘themes’

Canada’s national pension fund invests for the long-term, its CEO told CNBC on Sunday, and he named trends that are helping to guide its decision-making. “We’re trying to go deep on certain areas where we see long-term trends and try to identify the best parts of those themes to invest in, companies to invest in, to express that view,” Mark Machin, president and CEO of Canada Pension Plan Investment Board, told CNBC’s Martin Soong at the China Development Forum...

March 25, 2019
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22Mar

UK Pensions Secretary Backs Collective Defined Contribution Plans

Amber Rudd said new type of pension should ‘deliver improved investment returns.’ The UK’s Work and Pensions Secretary Amber Rudd said she supports allowing Collective Defined Contribution (CDC) pension plans in the UK, a decision that was welcomed by postal services provider Royal Mail and the Communication Workers Union (CWU). “These pioneering proposals should deliver improved investment returns for workers and savers while cutting costs and red tape for British job creators,” said Rudd. “The new type of pension...

March 22, 2019
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