May 2020
06May

UK Corporate Pension Funding Hammered by Pandemic in April

The accounting position of the defined benefit pension plans of the UK’s FTSE 350 companies plummeted in April as it swung from a surplus of £10 billion ($12.4 billion) at the end of March to a deficit of £52 billion at the end of the April due to the impact of the COVID-19 pandemic. Data from consulting firm Mercer’s Pensions Risk Survey shows that liabilities of the UK’s 350 largest listed companies surged by £102 billion to £897 billion...

May 6, 2020
News, Slider, , , , ,
Read more...

April 2020

21Apr

US Public Pension Funding Levels Plunge to 66% in Q1

The funded level of the 100 largest US public defined benefit pension plans plunged to 66% during the first quarter from 74.9% at the end of last year, according to Milliman. It was the largest quarterly drop in the history of the firm’s public pension funding index (PPFI), and it eliminated the funding level improvements made during 2019. Volatility from the COVID-19 pandemic resulted in net negative cash flow of approximately $24 billion and a $419 billion loss in...

April 21, 2020
News, Slider, , , , ,
Read more...
18Apr

Pension Funding Index April 2020

By Charles J. Clark and Zorast Wadia Milliman analysis: Corporate pensions in March see surprising $93 billion funded status gain from massive surge in discount rates, despite heavy investment losses Milliman 100 PFI funded ratio improves to 85.6% The funded status of the 100 largest corporate defined benefit pension plans rose by $93 billion during March as measured by the Milliman 100 Pension Funding Index (PFI). The funded status deficit improved to $255 billion at the end of March...

April 18, 2020
Books, Investment, Pension Management, Reports,
Read more...
17Apr

Public pension funds shouldn’t wait for a return to ‘normal’

By Anthony Randazzo The past few weeks have seen America’s leaders wrestle with the human costs of inaction in the face of the COVID-19 pandemic. And in the next few months, state and local leaders will have to step up again and act decisively to avoid the financial effects of this pandemic from creating long-term damage to their public sector retirement systems. Unlike the demographics most vulnerable to succumbing to the physical effects of the virus, those with the biggest cause...

April 17, 2020
News, OP Ed, Slider, , , ,
Read more...
06Apr

US. Underfunded public plans facing a new round of woes

The coronavirus has increased pressure on underfunded public pension plans that were already facing significant stress before the crisis. Not only have plans' investment portfolios taken double-digit losses as a result of the pandemic, but government plan sponsors will need to increase their contributions at a time when revenues are down and expenditures are up. Read also US. Some companies are cutting 401(k) matches because of the coronavirus "This has put a lot of strain and stress on pension deficits,...

April 6, 2020
News, Slider, ,
Read more...
03Apr

The Political (In)Stability of Funded Pension Systems

By Roel M. W. J. Beetsma, Oliwia Komada, Krzysztof Makarski, Joanna Tyrowicz We analyze the political stability of capital funded social security. In particular, using a stylized theoretical framework we study the mechanisms behind governments capturing pension assets in order to lower current taxes. This is followed by an analysis of the analogous mechanisms in a fully-edged overlapping generations model with intra-cohort heterogeneity. Funding is efficient in a Kaldor-Hicks sense. Individuals vote on capturing the accumulated pension assets and...

April 3, 2020
Articles, System Sustainability, ,
Read more...

March 2020

24Mar

Australia’s pensions industry in urgent talks on coronavirus crisis changes

Australia's A$3 trillion ($1.72 trillion) pension industry was not consulted on the federal government's decision to allow the unemployed and sole traders early access to retirement savings and is now in urgent talks about the move, sources said. Read also New ZealandTime to rethink everything especially super policy Prime Minister Scott Morrison and Treasurer Josh Frydenberg on Sunday revealed a A$66 billion fiscal stimulus package including measures allowing workers to take up to A$20,000 out of their superannuation savings over...

March 24, 2020
News, Slider,
Read more...
09Mar

World Bank: Overcoming Major Barriers in U.S. Reverse Mortgage Market

Reverse mortgages have significant potential in serving aging parts of the global population, and can allow more seniors to make financial ends meet in retirement since loan proceeds can be applied to a multitude of scenarios. However, some key market realities and roadblocks with universal application to multiple parts of the world have kept reverse mortgages from flourishing in both well- and under-developed economies alike. This is according to a newly-published policy paper authored by researchers Peter Knaak, Margaret Miller...

March 9, 2020
News, Slider, ,
Read more...
02Mar

New Zealand. Reverse mortgages boom as pensioners opt to put retirement on the house

Low interest rates and high house prices are prompting more retirees to take out a reverse mortgage against their homes. Reverse mortgages - primarily offered in New Zealand by Heartland Bank - allow people to borrow a sum of money against their houses. They do not have to make any repayments until the house is sold. But interest accrues and compounds while the loan is not being repaid, so the amount that finally falls due can be a lot...

March 2, 2020
News, Slider,
Read more...

February 2020

05Feb

FTSE 350 pension deficit increases sharply as UK exits EU

Mercer’s Pensions Risk Survey data shows that the accounting deficit of defined benefit (DB) pension schemes for the UK’s 350 largest listed companies increased from £40bn at the end of December 2019 to £57bn on 31 January. Liability values increased by £34bn to £916bn compared to £882bn at the end of December. The increase was primarily driven by falls in corporate bond yields. Asset values were £859bn (an increase of £17bn compared to the corresponding figure of £842bn at...

February 5, 2020
News, Slider, , ,
Read more...