July 2021

Prudential to Sell Its Retirement Division to Great-West for $3.55 Billion

Prudential Financial Inc. said it would sell its full-service retirement business to a unit of Canada’s Great-West Lifeco Inc. for $3.55 billion as the life insurer continues implementing Chief Executive Officer Charles Lowrey’s three-year transformation plan. The business will be purchased by Great-West’s Greenwood Village, Colorado-based Empower Retirement division. Prudential expects total proceeds of about $2.8 billion from the sale, which is expected to close in the first quarter of next year, the companies said in a statement. It will...

Canada. 27% of homeowners planning to access pension early despite adequacy fears

Nearly a third (31 per cent) of homeowners over 40 plan to work beyond state pension age due to concerns over affordability and financial insecurity, whilst over a quarter (27 per cent) plan to access their pensions early, according to research from Canada Life. The survey found that many older savers had fears around funding their retirement, with close to a third (31 per cent) of homeowners over 40 who are currently working stating that they cannot afford to retire...

India. Want to give more options to pension funds, so opening up IPO investments: PFRDA chairman

Pension Fund Regulatory and Development Authority (PFRDA) will soon allow pension fund managers (PFMs) to invest in initial public offerings (IPOs), follow on public offers (FPOs) and offer for sale (OFS). This would mean that PFMs could use their investment corpus to invest into upcoming IPOs including the Rs 16,000 crore initial public offering of Paytm. Speaking to Moneycontrol, Supratim Bandyopadhyay, Chairman, PFRDA said these will allow PFMs to have a wider range of investment options. "This will broaden the PFMs investment...

UK. Govt introduces public service pensions bill in parliament

The new legislation, introduced by Conservative peer Viscount Younger of Leckie, was first announced in the Queen’s Speech in May. The bill intends to fix the age-based discrimination against younger pension scheme members that stems from reforms introduced to public sector schemes in 2015. These reforms meant that while most members were moved to new career average revalued earnings schemes, individuals aged 44 years or more on April 1 2015 were allowed to stay in their original defined benefit schemes. The Court...

China to allow tax deductions for care of small children to help boost births

China will allow tax deductions for expenses on children under three as part of a major relaxation in child-bearing policy to stem a dramatic decline in births in the world's most populous country, an official document showed on Tuesday. Beijing announced on May 31 that it would permit married couples to have up to three children, rather than just two. It scrapped a decades-old one-child policy in 2016 in favour of a two-child limit to try and stave off risks to...

UK. DWP failed in communicating women’s state pension age changes

Government officials were too slow to tell many women they would be affected by the rising state pension age, the Parliamentary Ombudsman has ruled. The finding brings the prospect of compensation closer for thousands of women born in the 1950s who have long been furious about the issue. It marks a significant victory for the Waspi (Women Against State Pension Inequality) campaign. However, the ombudsman has no power to refund "lost" pensions. It is also unable to recommend that anyone receive their state...

US. Federal government’s rescue plan for multiemployer pensions falls flat, critics say

Earlier this year, Congress threw a lifeline to troubled multiemployer pension plans. But the rescue effort is getting tangled in regulations that may ultimately sink many of the retirement plans, pension experts say. The Pension Benefit Guaranty Corp., which insures defined-benefit pension plans, issued rules early this month outlining a new multiemployer-plan financial-assistance program mandated by the American Rescue Plan passed in March. The law allows certain underfunded multiemployer plans to apply for taxpayer-funded financial assistance that carries no repayment...

Nigeria’s pension penetration level low, says PenOp

Nigeria should deepened its penetration beyond 11 per cent, the President, Pension Fund Operators Association of Nigeria (PenOP), Mr Wale Odutola, has said. Odutola spoke at the just-concluded National Assembly retreat in Lagos. He stated that there was the need to note the areas where the industry lags behind other countries, one of which is level of pension penetration. He said this became necessary because South Africa’s pension penetration is 19 per cent, Kenya 20 per cent and United Kingdom 77...

Austrian sustainable funds see record rise in AUM to €22.4bn

Assets under management (AUM) for Austrian sustainability-driven investment funds rose by 29% to €22.4bn in the first half of this year, up from €17.3bn in 2020, according to figures published last week by the Vienna-based investment companies association VÖIG. The number of sustainable funds on the market grew from 96 in 2020 to 106 in the first half of this year, figures show. Last year the Fachverband der Pensionskassen, Austria’s occupational pension fund association, floated the idea of a “green supplementary...

U.K. releases proposals for collective defined contribution plans

The U.K. Department of Work and Pensions is seeking views from trustees and plan sponsors on its draft collective defined contribution plan regulation published Monday. The proposal follows the U.K. Pension Schemes Act 2021, which permitted employers for the first time to launch collective DC plans, also referred to as collective money purchase plans. In a CDC plan, income is secured by pooling plan participants' assets and investments, and participants bear the longevity and investment risk. That is in contrast to...