December 2020

08Dec

The Consequences of Long-Term State Pension Underperformance

The financial health of state pension plans has worsened and advisors should avoid municipal bonds from certain issuers. Each year Cliffwater LLC prepares an annual report on the financial condition of state pension plans over time. This year’s report covers 66 state pension plans and almost $3 trillion in assets. Following is a summary of some of the key highlights of the report, which covers the 19 fiscal years ending June 2019: Following the great bull market of the...

December 8, 2020
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07Dec

For institutional investors, ETFs can make meeting liquidity needs easier

Liquidity is never far from the minds of institutional asset owners but the importance of having a comprehensive liquidity plan came into sharp relief during the pandemic-induced spike in market volatility earlier this year. When stock prices plummeted in February and March, the asset allocation of many institutional portfolios fell out of synch with policy benchmarks, with asset owners finding themselves significantly underweight equity and overweight fixed income. That would have been the perfect time to rebalance, but an...

December 7, 2020
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07Dec

2020 OECD Pensions Outlook

From OECD The OECD Pensions Outlook provides an analysis of different pension policy issues in OECD countries covering both public and private, defined benefit and defined contribution, pay-as-you-go and funded retirement provisions. Prepared against the background of the COVID-19 pandemic, the 2020 edition discusses policy guidelines to help governments strengthen the resilience of their retirement savings and old-age pension systems. Get the book Here!

December 7, 2020
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04Dec

Why a Canadian Pension Fund Performs Better Than Yours

Over the period from 2004 through 2018, Canadian pension funds outperformed their international peers in asset performance and liability hedging, according to a research paper that says a key to this success is a three-pronged business model that would have boosted the returns of US and other pensions had they used the same tactics. The three-pillar business model consists of managing assets in-house to reduce costs, redeploying resources to investment teams for each asset class, and funneling capital toward...

December 4, 2020
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04Dec

Nigeria: FG inaugurates 16 board members of PENCOM

WorldStage Newsonline– The Federal Government of Nigeria has inaugurated 16 members of National Pension Commission (PENCOM) board, to proffer innovative and feasible solutions to the challenges of the pension administration in Nigeria. Mr Boss Mustapha, Secretary to the Government of the Federation (SGF), at the inauguration on Thursday in Abuja, said members of the board were also urged to ensure the implementation of sustainable pension policies. While congratulating the board members, Mustapha noted that Nigeria, in recent times had some...

December 4, 2020
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03Dec

Reconsidering Risk Aversion

By Daniel J. Benjamin, Mark Alan Fontana, Miles S. Kimball Risk aversion is typically inferred from real or hypothetical choices over risky lotteries, but such “untutored” choices may reflect mistakes rather than preferences. We develop a procedure to disentangle preferences from mistakes: after eliciting untutored choices, we confront participants with their choices that are inconsistent with expected-utility axioms (broken down enough to be self-evident) and allow them to reconsider their choices. We demonstrate this procedure via a survey about...

December 3, 2020
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02Dec

Proposed Fee Cap for Mexican Pension System Could Bring Challenges

On Sept. 25, 2020, a Mexican Pension System (SAR) reform bill was submitted to the congress containing enhancements previously proposed by Mexico’s president. The bill also proposes a cap on management fees charged by pension fund managers (Afores) that would reduce annual fees by over 40%. The SAR continues to undergo changes aimed at improving the projected adequacy of pension savings. The target-date fund framework aims to improve investment returns. Contributions would increase to 15% under the current reform...

December 2, 2020
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01Dec

Nigeria. The pros and cons of Pension Fund Administrator transfer

After my first article on the best pension fund managers in Nigeria, a few people have commented differently on the article. In response to the comments, I have decided to do another article on the pros and cons of Pension Fund Administrator (PFA) transfer. Here are some of the advantages Better Performance The major reason for any investment is to make gains. Most investment gains are measured with investment performance. When a fund manager performs poorly relative...

December 1, 2020
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November 2020

30Nov

COVID-19: How do pension systems fare?

Saving for retirement is the primary investment objective for most individuals. Yet the ability to meet this objective depends not only on the investments made, but on the system on which retirement income provision rests. Put simply, how well a pension system is designed, including the level of benefits it provides, its sustainability, and its governance, has a critical bearing on the ability to meet one’s retirement goals. Pension funds, as some of the biggest institutional investors in financial...

November 30, 2020
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25Nov

US. Effect of the Biden Administration on Health and Retirement Benefits

What president- elect Joe Biden´s administration will be able to get done regarding health care and retirement policy will depend much on the political tone in Congress. Control of the Senate is hinging on two Georgia runoff elections in January, notes Geoff Manville, partner and government relations leader in Mercer’s Law and Policy Group. He says most observers believe Democrats will lose one of those races, which would give Republicans Senate control. “That would make it all but impossible...

November 25, 2020
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