August 2018

China. New pension target securities funds get the green light

China has just approved 14 Chinese asset managers to float pension target securities investment funds, a move to improve A-share market liquidity and offer the nation's middle-income earners more diversified pension management solutions. China Asset Management Co Ltd, China Southern Asset Management Co Ltd, Bosera Asset Management Co Ltd, E Fund Management Co Ltd and 10 other asset management companies became the first batch to receive regulatory approval, according to the China Securities Regulatory Commission on Monday. People close to China...

US. Few in Temporary or Alternative Jobs Have Access to Employer-Provided Retirement Plans

Contingent workers—those who provide services on a short-term or temporary basis—are much less likely than traditional workers to have a retirement plan at work, according to data released recently by the federal Bureau of Labor Statistics (BLS). According to the bureau, 23.4 percent of contingent workers were eligible for—or had access to—employer-sponsored pension or retirement plans in 2017. This is about half the rate for more permanent or traditional workers, among whom 47.6 percent were eligible for an employer-sponsored plan....

Why the World’s Biggest Pension Fund Should Buy More Junk Bonds

A former senior economist at the Federal Reserve suggests that the world’s largest pension fund should step out of its comfort zone. Yoshio Nozawa, who researched corporate bond spreads for the Fed over the past five years, said Japan’s Government Pension Investment Fund and its peers should buy more high-yield bonds and alternative assets such as real estate. The pension fund’s long-term performance of its 158.6 trillion yen ($1.43 trillion) in assets is more important than quarterly results, he said. “Investors...

US. The stealth pension mortgage on your house

States with unfunded public employee retirement obligations will have to rely on real estate property as their ultimate collateral to deal with the risk, writes experts on The Wall Street Journal. "The affluent can escape sales and income taxes by moving to a new state—but real estate stays behind," explain the experts. "Property values must ultimately support the obligations that politicians have promised, even if those obligations aren’t properly funded... Whether or not unfunded obligations are paid with property...

Thought-Leading Fintech Session Predicts The Future Is Chat-Bots

It’s not often that thought-leaders gather around a table, but that’s exactly what the University of Essex and insurance industry disrupters Hood Group set out to do. Just last month they pulled together industry leaders to talk about cyber security, how we analyse our data and waves in artificial intelligence. And although top-name specialists from Microsoft, Filament, Profusion, and Signal Media attended, the real buzzword of the day was ‘chat-bot’ as they discussed the implications these handy automated new teams...

Russian pension reform sparks protests as Putin’s ratings fall

Pension reform is genocide!” “You deprive us of our pension – we deprive you of your authority!” “We don’t want to die working!” These were only some of the slogans shouted by Russian protesters during mass rallies last weekend, held in response to a new reform that will rise the retirement age in Russia. From Moscow to St Petersburg to Siberia to the country’s Far East, the rallies were a nationwide phenomenon across the world’s biggest country. For Vladimir Putin, the...

UK. Pension transfers could cost members £2,600 over expected lifetime

Pension members choosing to transfer out of their employer’s scheme could receive an income that is £2,600 lower over their expected lifetime, according to research by XPS Pensions Group. The report, Member Outcomes Under Freedom and Choice, published today (7 August 2018), looks at data on defined benefits (DB) scheme transfers, collated by XPS Administration over the period since 2016. The research also found: Depending on the choice of retirement vehicle chosen to receive a transfer, an individual could run out of...

US. The Call to Care for Aging Parents Comes Sooner Now

Adrienne Glusman was 29, single and carefree when she became her mother’s caregiver. The only child of divorced parents, Ms. Glusman was living in New York City at the time, working, traveling, and going out with friends. Her mother, Hetty, in her mid-60s, was retired and living in Florida when she was diagnosed with Parkinson’s disease. It seemed manageable, until she fell, hit her head and wasn’t discovered for 12 hours. Read more The wall street journal

UK pension industry faces transparency inquiry

As Australia’s superannuation industry undergoes its own grilling at the Royal Commission, the UK Government has announced the Commons Select Committee will hold an inquiry into pension costs and transparency. The inquiry would examine whether the pensions industry provides sufficient transparency around charges, investment strategy and performance to consumers. It comes off the back of the Committee’s recent inquiry into pension freedom and choice, which found that some scheme members were being “shamelessly bamboozled” into signing up to unsuitable ongoing adviser...

Australia. Two regulators are enough – perhaps more than enough

It is tempting to join the media pile-on about the Australian Prudential Regulation Authority’s apparent lack of action on underperforming superannuation funds, but in terms of true legal powers, the regulator appears to have more bark than bite. This point will probably loom large in the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry’s fifth round of hearings. This latest round began yesterday and will put the focus on superannuation for a fortnight. We know APRA and the...