May 2020

Peru takes another stab at major pension reform as AFP bill forced through

Peru’s government has submitted a bill for urgent consideration that establishes a special commission tasked with proposing ways to improve the country’s private and public pension systems. The commission will look at areas such as sustainability, pension size, coverage and demographics. President Martín Vizcarra (pictured) has previously called for an overhaul. Read also OECD pension chief says reforms must continue, urges crisis policy caution The body will comprise representatives of congress, the executive, the central bank and financial services...

ATP, PFA assets plummet as coronavirus hits

ATP, Hilleroed, Denmark, posted a -26% investment return for the three months ended March 31, as market fluctuations hit international equities and inflation-related securities. An update Thursday said the pension fund's return was equal to a 24.7 billion Danish kroner ($3.6 billion) loss, compared with a gain of 16.8 billion kroner for the three months ended March 31, 2019. The fourth quarter 2019 return was not available. Assets increased 0.4% to 889.5 billion kroner in the three months ended...

Behind the Idea: SmartPension

The auto-enrolment pension provider Smart Pension, today announced a new partnership with London-based FinTech DueDil, enabling Smart to deliver its market-leading platform as a service model. The company is known for playing its part in transforming the pension sector through cloud-based technology. It has allowed Smart to quickly adapt to suit the government’s response to COVID-19 including employer support for ongoing contributions. Darren Philp is the Director of Policy and Communications at Smart Pension and Sam Barton is the...

Canada. Pension plan regulatory relief and COVID-19 – additional measures announced

In our most recent posts, we highlighted some of the regulatory relief available to administrators of Ontario registered pension plans and plans registered in jurisdictions other than Ontario as a result of COVID-19. In this post, we highlight additional relief measures that have been announced for administrators and sponsors of registered pension plans, including the announcement of significant funding relief for sponsors of federally regulated defined benefit registered pension plans. Federal On April 15, 2020, the federal government announced...

April 2020

OECD pension chief says reforms must continue, urges crisis policy caution

Global pension reform initiatives that got underway prior to the coronavirus outbreak must continue – but implementation needs careful reconsideration. That, along with concerns over the potential long-term impact of pension freedom and contribution relief measures, was among the key points raised during a webinar hosted by industry organisation the International Federations of Pension Funds Administrators (FIAP). Chile – which has a defined-contribution, or private scheme, and a solidarity pillar – is among those that have embarked along the...

South Africa: The Rules Around Pensions in a Time of Mass Job Losses

In addition to the stress faced by employees who might lose their jobs during the crisis engendered by Covid-19, there is the added concern of whether their pension contributions will remain safe or fairly managed. The Financial Services Conduct Authority (FSCA) warned, at the end of March, that many distressed employers might default on their employees' contributions to retirement funds, as a direct consequence of Covid-19's impact on businesses and the economy. While the FSCA reminded the public that...

Pension Fund Industry in Mexico: Analyzing the S&P/BMV Mexico Target Risk Index Series across Different Economic Crises

By Jaime Merino This article is reprinted from the Indexology blog of S&P Dow Jones Indices. It is unnecessary to give an update on today’s economic situation since most already have a wealth of information over the repercussions of the COVID-19 pandemic. I will instead focus on another major concern: how have pension funds performed, and furthermore, are there similarities in how they have performed during other crises? After the S&P/BMV IPC dropped 16.38% from its highest monthly return posted...

Japan’s GPIF Seeking Active and Passive Managers for Foreign Bonds

The Government Pension Investment Fund (GPIF) in Japan is aggressively seeking active and passive managers of foreign bonds to diversify its portfolio beyond low-paying Japanese bonds. The world’s largest pension fund is seeking broad asset managers with access to various benchmarks, such as corporate high yield indexes, emerging market indices, and aggregate indexes, the GPIF said. On Monday, the pension fund also said it is considering appointing a new fund of fund (FoF) manager for infrastructure assets...

UK. Pension firms issue warning to savers over transfers

To prevent people from losing out, anyone who wants to shift their money will now get a letter from their scheme stating that a transfer is unlikely to be in their best long-term interests. Pension scheme trustees will warn savers of the risks during the pandemic and urge them to consider the decision carefully. Read also ATP, PFA assets plummet as coronavirus hits The warning letter will be signed by watchdog The Pensions Regulator (TPR) , the Financial Conduct Authority (FCA),...

What the Economic Downturn Could Mean for Pension Plans

By Mark Miller Investing guru Bill Bernstein has compared investors in defined-contribution plans to airline passengers sent to the cockpit to fly the plane. Bernstein would much prefer a retirement system that relies on defined-benefit pensions, with their professional management and automatic participation. The unfolding coronavirus crisis underscores the value of professional pension pilots--and the structure of defined-benefit plans, which don't rely on short-term market performance to meet near-term obligations. The same claim cannot be made for the 401(k) or IRA...