January 2021

28Jan

US. Biden May Have to Move Quickly to Reverse Anti-ESG Rule

The clock is ticking for the Biden administration to nullify Donald Trump’s restrictions on retirement plan fiduciaries, rules by which the Republican sought to limit their ability to direct money into environmental, social and governance funds. Trump’s Department of Labor moved earlier this month to adjust the Employee Retirement Income Security Act of 1974 (ERISA) to require those overseeing pension and 401(k) plans to always put economic interests ahead of so-called non-pecuniary goals. It was seen as a direct...

January 28, 2021
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22Jan

US. Special Report: Why Pennsylvania SERS is Moving Toward a Liability-Driven Benchmark

Seth Kelly, the investment chief at the Pennsylvania State Employees’ Retirement System (SERS), joined the pension fund just half a year ago, but he’s already overseeing some big changes. Board members at the $31.5 billion pension fund last month announced that they are increasing their fixed income allocation in order to move the pension fund toward a liability-driven benchmark. The trustees hope that the changes to the investment policy statement (IPS), including a new 7.8% target for long...

January 22, 2021
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21Jan

The Benefit of Diversified Guaranteed Income for Retirees: Combining Immediate Fixed and Immediate Variable Annuities

By David Blanchett This paper explores the potential benefits of developing a retirement income that considers both immediate fixed annuities (IFA) and immediate variable annuities (IVA) using a stochastic utility model combined with a scenario framework. Optimal annuity allocations vary considerably across household type, but certainty equivalent retirement income increases by 20 percent, on average, when incorporating annuities. Total annuity allocations increase when both IFAs and IVAs are considered, and retirees realize only approximately two-thirds of the benefits of...

January 21, 2021
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21Jan

Nordic pension giant picks Nordea to run $240m EM strategy

Finnish pension insurance giant Varma has selected Nordea to run ESG-focused $240m emerging markets equity mandate. Juliana Hansveden, portfolio manager of Nordea’s Emerging Stars Equity strategy, said better run companies are more likely to succeed over the long term, which means it is crucial to properly understand and analyse ESG risks. ‘Emerging markets continue to offer a lot of opportunities, and we are looking forward to delivering long-term sustainable performance to Varma and its stakeholders,’ she added. Varma is...

January 21, 2021
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18Jan

US. Reforming public pensions

By Nadeem Jeddy Government employees need lifelong incomes to stay independent and promote public interest. Private employees serve no higher cause. Replacing public pensions with traditional defined contribution (DC) schemes like Voluntary Pension System (VPS) and provident funds (PFs) will destroy the security of lifelong incomes. Government employees will be forced to take greater interest in personal finance. New forms of malfeasance will emerge that will be hard to catch and difficult to reverse. A better alternative would be to offer...

January 18, 2021
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11Jan

Infrastructure investing is no pension fund free ride (In response to “pension funds need a radical rethink”)

By Bernard H. Casey Robin Harding argues that “pension funds need a radical rethink” (Opinion, January 6). But remember investing in infrastructure is nothing new for pension funds. I recall being at an event at the London School of Economics in September 2011 where Nick Clegg, then the deputy prime minister, proposed this as a way to get the economy moving without the need for additional public expenditure. I raised the example of Australian and Canadian funds with him —...

January 11, 2021
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11Jan

New Zealand. Private superannuation savings schemes ‘underperforming’

People in old-style workplace superannuation savings schemes are often getting lower returns from their investments than they would in KiwiSaver schemes, and it’s prompting some to call for change. Old-style workplace super savings schemes are increasingly revealing to savers how they are tracking compared to KiwiSaver funds, and it’s not flattering their performance. Schemes publish charts showing their funds’ performance compared to the median, or average, KiwiSaver fund in each fund category. There is big money tied up in...

January 11, 2021
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07Jan

UK. Regulators and police say Covid lockdowns have driven up online pension scams and demand regulation of Google, Facebook and others

As people spend longer shopping online, scammers pounce through Google and Facebook.Online pension scams run through social media sites are surging as people are stuck at home in lockdown, regulators and police warned MPs today. Scammers have become increasingly skilled at advertising fake pension investments through Google, Facebook and other digital means, and the increased use of the internet by the public to buy shopping and services has created a fertile environment for the scammers, officials from the Financial Conduct...

January 7, 2021
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07Jan

Dutch schemes slow to implement RI agreement

Not a single one of the more than 80 Dutch pension funds that signed an agreement on furthering responsible investment two years ago has yet implemented all of its guidelines, a monitoring commission has found. The commission has found this “worrisome”, it said in a report it published just before Christmas. The so-called IMVB-convenant – an agreement for international responsible investing – has been signed by more than 80 pension funds, accounting for more than 90% of total Dutch pension...

January 7, 2021
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06Jan

India. New fee structure opens the doors wider for pension fund managers: PFRDA chief

‘Increased fees will ensure both profitability and investment in infra’ Pension regulator PFRDA has now taken a big initiative to revamp the pension funds management structure in India and position the industry for strong decadal growth that could take the overall assets under management of the National Pension System (NPS) to ₹30-lakh crore by 2030. The regulator has now come out with a new Request for Proposal (RFP) for selection of sponsors of pension funds for NPS, throwing open the door for...

January 6, 2021
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