October 2022
06Oct

UK. LDI Fallout Will Spur Pension Funds to Seek Life Sector Arrangements

The sudden need for pension funds to put up large amounts of extra collateral due to tumbling gilt prices will lead more UK defined-benefit pension funds to favour pension risk transfer deals with life insurers over liability-driven investment (LDI) arrangements with asset managers, Fitch Ratings says. The rapid drop in gilt prices following the UK’s ‘mini-Budget’ on 23 September led to a sharp increase in collateral requirements from many LDI funds as derivative contracts protecting against lower interest rates moved...

October 6, 2022
News, ,
Read more...
06Oct

Hong Kong Pensions See Record Plunge of 22% – SCMP

The territory’s Mandatory Provision Fund lost $32.98 billion, equating to $7,197.63 per person, the South China Morning Post reported Hong Kong’s pension fund lost 21.5% on average in the first nine months of the year, its worst performance in 22 years, The South China Morning Post reported. The country’s Mandatory Provision Fund (MPF) lost $32.98 billion, equating to $7,197.63 per person, said the report. Analysts attributed the loss to the plunge in stock markets in Hong Kong and on mainland China,...

October 6, 2022
News, ,
Read more...
05Oct

UK. Renewed focus on pension fund investment strategy following Bank of England’s intervention in gilt market

The ramifications of the Bank of England's urgent purchasing of government bonds are being felt by pension funds and some insurance firms. The upheaval in gilt (UK government bond) markets that led to last week's spectacular intervention from the Bank of England continues to reverberate. The Bank was obliged to buy long-dated gilts - those with a maturity of 20 or 30 years - on Wednesday last week following a wave of forced selling by pension funds. Those pension funds had been...

October 5, 2022
News, ,
Read more...

September 2022
30Sep

Ghana. SSNIT pension scheme continues to post negative return on investments; records -12.6% return in quarter 1 – Report

The Social Security and National Insurance Trust (SSNIT) pension scheme continued to post a negative real rate of return, recording -12.6% at the end of the first quarter of this year. According to the Financial Stability Review report by the Bank of Ghana, assets available for benefits of the SSNIT-managed Basic National Social Security Scheme (BNSSS) dropped marginally by 2.3% to ¢11.28 billion in March 2022 from the ¢11.54 billion recorde in 2021 Quarter 4. Also, though the private pensions industry...

September 30, 2022
News, ,
Read more...
29Sep

BoE’s £65bn move driven by pension fund panic

The Bank of England stepped in to calm markets after some types of pension funds were at risk of collapse. It pledged to buy £65bn of government bonds after Friday's mini-budget sparked turmoil on financial markets and the pound plunged. Investors had demanded a much higher return for investing in government bonds, causing some to halve in value. Pension funds, which invest in bonds, were forced to start selling, sparking fears of a fresh market downturn. The Bank said its decision to buy...

September 29, 2022
News, ,
Read more...
29Sep

With Interest Rates Rising, Companies Look to Unload Pension Liabilities

The funding status of defined-benefit pension plans has been lifted by rising interest rates, which are expected to increase further Rising interest rates are boosting corporate pension plans, providing finance chiefs with an option to lighten their companies’ balance sheets and transfer obligations to insurers. The U.S. central bank has raised interest rates five times this year as it battles persistent high inflation, including last week when it opted for the third consecutive 0.75-point interest-rate increase and indicated further rate action. When...

September 29, 2022
News, , ,
Read more...
27Sep

UK. Pension schemes and inflation

In the 12 months to August 2022, RPI has increased by 12.3% and CPI 9.9%. With this recent significant rise in inflation, employers and trustees have been asking what the impact of this is upon their defined benefit pension schemes. Members are also concerned that, against high inflation and a 'cost of living crisis, their pensions will maintain their value in real terms. Impact on benefits Defined benefit schemes The rapid rise in inflation means that members of defined benefit pension schemes...

September 27, 2022
News,
Read more...
27Sep

Ghana. Total pension funds increased by 18% to ¢39.6bn in 2021

Total pension funds of the Three-Tier Pensions Scheme increased by 18% in 2021 to ¢39.6 billion, the latest Financial Stability Review by the Bank of Ghana has revealed. This is however lower than the 27% recorded in 2020. The decreased growth rate was attributable to the ongoing lump sum payments under the private pension schemes and a marginal growth of the Basic National Social Security Scheme (BNSSS). Also, private pension funds continued on a positive growth track in 2021. Total private pension funds...

September 27, 2022
News,
Read more...
20Sep

African Women Impact Fund launches with USD$60 million commitment to drive an inclusive investment environment

The Economic Commission for Africa (ECA) and Standard Bank Group, with the support of the Arab Bank for Economic Development in Africa (BADEA), the Motor Industry Retirement Funds (MIRF) and Copartes Pension Fund and the African Union Commission (AUC), have announced the African Women Impact Fund (AWIF) Initiative's achievement of its first commitment of USD$60 million. The announcement was made at the inaugural The Global Africa Business Initiative, held from 18 – 19 September during the week of the United...

September 20, 2022
News, , ,
Read more...
20Sep

The U.S. retirement system gets a ‘C+’ grade, experts say — even though it’s worth $39 trillion. Here’s why

The U.S. retirement system may seem flush — yet it ranks poorly in relation to those in other developed nations. Collectively, Americans had more than $39 trillion in wealth earmarked for old age at the end of 2021, according to the Investment Company Institute. However, the U.S. places well outside the top 10 on various global retirement rankings from industry players, such as the Mercer CFA Institute Global Pension Index and Natixis Investment Managers 2021 Global Retirement Index. According to Mercer’s index,...

September 20, 2022
News, ,
Read more...