February 2022
08Feb

ESG Vs. Impact Investing–Understanding Their Different Goals

The movement of investment capital into funds that seek to effect positive change has been substantial in recent years. Environmental, social and governance (ESG) assets rose to more than $35 trillion in 2020 to account for more than one-third of total global assets under management, according to the Global Sustainable Investment Alliance. This figure is expected to rise above $50 trillion by 2025. Despite this rapid growth, there remains deep skepticism about the effectiveness of the ESG framework. Some of...

February 8, 2022
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07Feb

Danish pension fund ditches Wizz Air over labour rights

Danish pension fund AkademikerPension said on Monday it was selling its stake in budget airline Wizz Air (WIZZ.L) over alleged "human and labour rights abuses" towards its workers. The $23 billion fund was one of 14 investors that called on Wizz in December to allow employees to form and join trade unions, saying their research suggested it was discouraging the practice in breach of staff rights. AkademikerPension said on Monday that, after meeting management, it saw no sign the airline's practices...

February 7, 2022
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Pension Markets in Focus 2021
03Feb

Pension Markets in Focus 2021

By OECD Pension Markets in Focus provides detailed and comparable statistics on retirement savings around the world. This annual statistical report contributes to the effort of making data on retirement savings available, as the OECD Core Principles of Private Pension Regulation advocates for, to enable regulators and stakeholders to evaluate the design and operation of the pension system relative to its goals. These statistics can support policy discussions through international comparisons and peer learning, and are the basis of policy...

February 3, 2022
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03Feb

Do pensions have real teeth? Evidence from the state government borrowing costs

By Sumit Agarwal, Chunlin Liu, Qiyuan Peng, Qun Wu & Ting Zhang Yes, they do. State governments with risky defined benefit pension plans have higher borrowing costs, as measured by larger bond offering yield spreads. To control for the potential endogenous issue, we utilize the instruments of actuarial firms’ reputation, and direct flight between the state capital and actuarial firm headquarter. We further identify the relation between pension plan investment risks and borrowing costs using two quasi-experimental shocks: the introduction...

February 3, 2022
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03Feb

Target Date Funds and Portfolio Choice in 401(k) Plans

By Olivia S. Mitchell & Stephen P. Utkus Target date funds in corporate retirement plans grew from $5B in 2000 to $734B in 2018, partly because federal regulation sanctioned these as default investments in automatic enrollment plans. We show that adopters delegated pension investment decisions to fund managers selected by plan sponsors. Including these funds in retirement saving menus raised equity shares, boosted bond exposures, curtailed cash/company stock holdings, and reduced idiosyncratic risk. The adoption of low-cost target date funds...

February 3, 2022
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03Feb

UK. Alternatives could give DC pensions higher returns at no extra risk, PPI says

Alternative assets could present defined contribution schemes with a means to increase value for members without taking on any extra risk, the Pensions Policy Institute has found. The PPI's report, published yesterday (February 2), stated DC default funds could better serve the needs of members by expanding the range of asset classes they invest in, putting more focus on better returns and lower volatility. Those who would benefit from an increased focus on returns include those working beyond the state pension...

February 3, 2022
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03Feb

Impact Investing Ghana receives RISA funding to support Research and Industry

Impact Investing Ghana (IIGh) has received GBP 109,536 from the Research and Innovation Systems for Africa (RISA) fund to foster research-industry connections in Ghana. The project aims to ‘strengthen synergies between research and industry to unlock pathways to financing innovation that will improve integration and coordination, as well as support demand for the financing by supporting Enterprise Support Organisations (ESOs). Strengthening the connections between research and industry is essential for innovation, commercialisation, and dissemination of research results. While Ghana has research...

February 3, 2022
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03Feb

US. Investment Opportunities for DB Plans Moving Forward

As corporate defined benefit  (DB) plans consider market volatility, interest rate movements and cash flow needs, there are certain investments and strategies that investment managers suggest they consider. Adam Levine, investment director of abrdn’s Client Solutions Group in New York City, says funded ratios for corporate DB plans improved quite a bit in 2021 both because of returns and discount rate movements, so more plans are moving into fixed income to protect their funded statuses. Closed or frozen plans, especially,...

February 3, 2022
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02Feb

​Pension funds neglect human capital when setting investment policy, say experts

Pension funds should always take into account human capital, or the career perspective of their members, when determining how much risk they can take with their investments. But they too often fail to do this, according to experts. The degree of certainty of future labour income affects the risk capacity of pension participants; the more predictable and stable their income, the more risk they can shoulder, argued Thomas Pistorius, a risk manager at Pensioenfonds Vervoer, the €37bn fund for the...

February 2, 2022
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01Feb

U.S. public pension funds may turn to more ‘aggressive’ investment, report says

U.S. public pension funds will likely have to switch to more aggressive investment strategies in the coming years to fill funding gaps despite assets held by sovereign investors having grown to record levels amid the 2021 equity market boom, a new report said. On average, the difference between assets and liabilities at U.S. public pension funds, known as the "funded ratio," remains "unsatisfactory" at less than 75%, sovereign investor specialist Global SWF said in a report. To boost returns, many will...

February 1, 2022
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