September 2021

Driving Value for Money in defined contribution pensions

By The Pensions Regulator & Financial Conduct Authority This discussion paper was published jointly by the UK’s Financial Conduct Authority and The Pensions Regulator. A focus on Value for Money (VFM) is a key part of ensuring defined contribution (DC) pensions maximise the income savers have at retirement. In this discussion paper, we invite views on developing a holistic framework and related metrics to assess VFM in all FCA and TPR regulated DC pension schemes (workplace and non-workplace). At this stage, we...

U.S. corporate pension funding rises in August – 2 reports

Funding ratios for U.S. corporate pension plans increased in August, according to reports from Legal & General Investment Management America and Wilshire. LGIMA found in its monthly pension solutions monitor that the funding ratio of a typical corporate pension plan increased by 1.6 percentage points to 90.8% in August primarily due to strong performance from global equities. LGIMA estimated U.S. Treasury rates rose 3 basis points while credit spreads widened by 2 basis points, resulting in the average discount rate rising...

August 2021

On The Investment Strategies in Occupational Pension Plans

By Frank Bosserhoff, An Chen, Nils Sørensen, Mitja Stadje Demographic changes increase the necessity to base the pension system more and more on the second and the third pillar, namely the occupational and private pension plans; this paper deals with Target Date Funds (TDFs), which are a typical investment opportunity for occupational pension planners. TDFs are usually identified with a decreasing fraction of wealth invested in equity (a so-called glide path) as retirement comes closer, i.e., wealth is invested more...

July 2021

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...

Room to Thrive: Why Principles-based Standards Make Sense for Regulating Contingent Pension Plans

By Barry Gros As membership in traditional defined-benefit pension plans declines, plans in which benefits are contingent on the financial status of the plan are becoming more common. Rather than placing all the risk on sponsors to deliver guaranteed benefits to members, these contingent pension plans require members to take on at least some of the risk that benefits may or may not meet expectations. This E-Brief focuses on two types of contingent plans, target-benefit plans and multi- employer pension plans....

Transferring A Business Following Insolvency In Germany: Who Pays The Pensions Bill?

Acquiring a business on insolvency can have pitfalls, especially if it involves an employee occupational pension scheme. Will the German Federal Labour Court's case law, which is favourable to acquirers, continue to apply following a recent European Court of Justice decision? The promise of a company pension makes companies an attractive employer for (potential) employees. However, if a company is to be sold at some point, the pension obligations can become a dealbreaker from the buyer's point of view. Particularly...

Pension Funding Index June 2021

By Zorast Wadia and Charles J. Clark The Milliman 100 PFI funded ratio increases to 98.8% as investment gains counter the effects of discount rate decreases The funded status of the 100 largest corporate defined benefit pension plans increased by $8 billion during May as measured by the Milliman 100 Pension Funding Index (PFI). As of May 31, the deficit improved to $21 billion from $29 billion at the end of April due to strong investment performance. The funded status improvement...

June 2021

China’s enterprise annuity funds hit 2.32 tln yuan

China's enterprise annuity funds hit 2.32 tln yuan BEIJING, June 27 (Xinhua) -- China's total enterprise annuity funds reached a new high of 2.32 trillion yuan (about 358 billion U.S. dollars) by the end of the first quarter of the year, official data shows. Read also World’s Top Pension Fund Books ‘Historic’ $339 Billion Gain In the first three months, the investment returns of enterprise annuity funds neared 6 billion yuan, with the weighted average rate of return standing at 0.3 percent,...

May 2021

Labour Force Survey in the EU, EFTA, United Kingdom and candidate countries

By Eurostat This report describes the main characteristics of the European Union Labour Force Survey (EU-LFS) conducted in 2019 in the Member States of the European Union (EU), three EFTA countries (Iceland, Norway and Switzerland), the United Kingdom and four candidate countries (Montenegro, North Macedonia, Serbia and Turkey). All of these countries provide Eurostat with EU-LFS microdata. The purpose of this report is to inform about the technical features of the surveys carried out in these countries, in order to...

U.S. corporate pension funding inches up in April – 3 reports

Funding ratios for U.S. corporate pension plans increased in April, according to reports from Wilshire Associates, Legal & General Investment Management America and Mercer. All three firms noted strong equity markets as the primary driver for the increases, partially offset by a decrease in discount rates leading to rising liability values. Wilshire's monthly report said U.S. corporate pension plans' aggregate funding ratio rose 0.6 percentage points to 92.9% in the month ended April 30. The change was the result of a...