November 2022
08Nov

US. Climate investors eye midterms with caution

After an active year of federal policy in favor of climate technology, investors are preparing to go it alone should the midterm results change the tone in Washington. Why it matters: Private investors may have to step up and fund potentially risky, capital-intensive projects like battery-manufacturing plants or grid-resilience projects should federal funds and incentives be pulled back or stopped altogether. Context: Several Republican candidates in state and federal races have indicated that ESG initiatives, particularly from large asset managers running...

November 8, 2022
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08Nov

Japan’s GPIF reports 0.88% decline for latest quarter

Japan's Government Pension Investment Fund, Tokyo, said its portfolio ended the latest quarter with ¥192.1 trillion ($1.33 trillion) in assets, down 0.88%, or $11.6 billion, from the prior quarter. In a statement posted on GPIF's website Friday, Masataka Miyazono, the pension fund's president, said rate hikes in the U.S. and Europe to contain inflationary pressures stoked concerns of recession, depressing stock prices at home and abroad. But the dollar's continued gains vs. the yen during the quarter ended Sept. 30, to...

November 8, 2022
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07Nov

UK bond turmoil leaves smaller pension schemes with longer-term costs

The recent crisis in Britain's government bond market means smaller UK pension schemes may fork out more money for a bespoke liability-driven investment (LDI) strategy in future to ensure better protection, industry sources say. LDI products, sold by asset managers such as BlackRock, Legal & General and Schroders to pension funds, use derivatives to help them "match" assets and liabilities so there is no risk of shortfall in money to pay pensioners. Pension funds, who must post cash as collateral against...

November 7, 2022
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07Nov

The future of defined contribution asset allocation

Strategy discussions around defined contribution workplace saving tend to focus on plan design and engagement but questions of asset allocation are also critical, according to a discussion summary of the most recent Jasper Forum. The Forum was led by Australian Retirement Trust head of asset liability management Brnic van Wyk, Putnam Investments' Mike Dullaghan, DCALTA's Jonathan Epstein, Aon's Rick Jones, Morningstar's Aron Szapiro, and Utrecht University PhD candidate Jorik van Zanden. In the discussion wrap-up, JM3 Projects principal John Mitchem said...

November 7, 2022
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04Nov

Kenya. Pension assets fall Sh33bn on bonds, equities hit

Pension industry assets under management shrank by Sh33.4 billion in the six months to June on the back of paper losses on equities and government bond holdings, representing the first half-year decline in retiree assets in 19 years. The Retirement Benefits Authority (RBA) said the contraction in the assets by 2.16 percent to Sh1.514 trillion was due to volatility in the financial markets and the political campaigns ahead of August’s general elections. The value of government bond holdings by the industry...

November 4, 2022
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04Nov

Pension funds can influence a major shift in ESG investing

Year after year, parties to the UN Climate Change Conference make pledges to mend their ways in key focus areas such as carbon emissions. The centrality of finance as the catalyst for change in climate matters has been reiterated. As such, pension funds can loop in to make a change and simultaneously derive satisfactory value for their members. Possibly the largest mobiliser of private finance globally, pension funds are a potential superpower in the climate change battle. With Kenya’s assets...

November 4, 2022
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03Nov

Risk Pooling and Precautionary Saving in Village Economies

By Marcel Fafchamps & Aditya Shrinivas We propose a new method to test for efficient risk pooling that allows for intertemporal smoothing, non-homothetic consumption, and heterogeneous risk and time preferences. The method is composed of three steps. The first one allows for precautionary savings by the aggregate risk pooling group. The second utilizes the inverse Engel curve to estimate good-specific tests for efficient risk pooling. In the third step, we obtain consistent estimates of households' risk and time preferences using...

November 3, 2022
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03Nov

Netherlands. PFZW divests from 114 fossil fuel companies

Pensioenfonds Zorg en Welzijn, Zeist, Netherlands, sold its holdings in 114 fossil fuel companies at a value of €470 million ($468 million) because they did not yet have plans to reduce their carbon emissions. The pension fund said in a notice on its website that it had also entered into discussions with 13 major fossil fuel companies, such as Shell and BP, about their climate ambitions and how they will be net-zero by 2050. Starting in 2024, PFZW will only invest...

November 3, 2022
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01Nov

No haircuts for pension funds or anybody, says Ghana’s president

Ghanaian President Nana Akufo-Addo ruled out losses for bond investors as a result of negotiations with the IMF for a $3bn bailout. Talks with the IMF are “going well”, Akufo-Addo said in a speech broadcast on Sunday in the capital, Accra. The president criticised speculation in the West African nation predicting a so-called haircut for investors, which he said has triggered renewed selling of the cedi. “No individual or institutional investor, including pension funds, in government Treasury bills or instruments will...

November 1, 2022
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October 2022
31Oct

UK. Increased pension engagement could trigger ‘unintended consequences’

Successfully engaging people with their pensions could result in “unintended consequences”, particularly given the current economic environment, Aon has said. Although Aon highlighted UK Pensions Awareness Week as an “opportunity” for the financial industry to connect with people and encourage active engagement with retirement savings, it acknowledged the difficulties presented by to the current cost-of-living issues. Among the issues highlighted by Aon was the possibility that individuals could be more inclined to cease their contributions or request early access to their...

October 31, 2022
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