March 2021
29Mar

US. Pension relief paves way for more de-risking

The $1.9 trillion American Rescue Plan Act signed by President Biden contains the most important changes in single employer pension funding relief rules since the introduction of the Pension Protection Act in 2006. What is changing? The new rules enforce two key changes in how minimum required contributions (MRCs) are calculated. Read also Retirees who pay the most in taxes make only $36,000 a year on average, study finds Firstly, the Act extends and enhances the Interest Rate Stabilization mechanisms brought in over the last decade (specifically, Moving...

March 29, 2021
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19Mar

UK. Pension longevity risk transfers reach record-breaking £55.8bn in 2020

Longevity risk transfers by UK pension schemes reached a record level of £55.8bn in 2020, rising above the £51.6bn completed the year before, analysis from LCP and Mercer has shown. Total buy-in and buyout volumes were £31.7bn, the second largest ever recorded in a single year but behind the £43.8bn bumper volumes racked up in 2019, with the record-breaking year instead being driven by longevity swaps reaching £24.1bn. Legal & General (L&G) had a 24 per cent market share, followed by...

March 19, 2021
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04Mar

Fraudsters prey on the fears of China’s aging population.

Shady retirement home and investment schemes have cheated China’s rapidly aging population out of hundreds of millions of dollars, spurring more than a thousand criminal cases in recent years. In a society that traditionally relied on family members to take care of elderly parents, fraudsters have been able to prey on fears that changing social norms and scarce resources will leave older people bereft, report Alexandra Stevenson and Cao Li for The New York Times. By 2025, more than 300 million...

March 4, 2021
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01Mar

UK. Pension risk settlements reached record high of over £54bn in 2020

The UK pension scheme risk settlement market hit a new record-high figure of over £54bn in 2020, and 2021 could be even bigger, according to analysis from Aon. The provider said it was possible to conclude that 2020 had broken the £52bn total achieved in 2019 now that all information on deals was available, while it cited “early indications” in its forecast that the new year could be worth even more. It also noted that the feat had been achieved despite...

March 1, 2021
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February 2021
26Feb

US. With lower returns on the horizon, public pensions will turn to riskier assets, Moody’s says

State and local government pension systems are increasingly dependent on investment returns, and at risk of increasingly volatile results, as funding levels remain depressed and systems increasingly start to pay out more than they take in, according to a new report from Moody’s. The credit-ratings agency anticipates higher volatility and lower returns across asset classes in 2021 compared to 2020, even as many pension sponsors have spent the past few years lowering their assumed returns from previous loftier targets that...

February 26, 2021
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19Feb

Global Pension Assets Study – 2021

By Willis Tower Watson The Global Pension Assets Study covers 22 major pension markets (the P22), which now totals US$52,522 billion in pension assets and account for 80% of the GDP of these economies. The study includes an analysis of the seven largest markets (the P7) which includes Australia, Canada, Japan, Netherlands, Switzerland, UK and US and comprises 92% of total pension assets. Get the book here

February 19, 2021
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19Feb

Late-career Unemployment Shocks, Pension Outcomes and Unemployment Insurance

By Samir Elsadek Mahmoudi In response to unemployment shocks, older workers deplete their 401(k)s, particularly after the waiving of the early withdrawal penalty on unemployment-motivated withdrawals at age 55. This paper shows that Unemployment Insurance (UI) keeps older workers from depleting their 401(k) assets following job losses. UI also incentivizes older unemployed workers to delay claiming their Social Security (SS) benefits beyond the earliest age of eligibility, 62. Overall, UI enhances the retirement income of the individuals having a history...

February 19, 2021
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17Feb

Deutsche Bank inks buy-in deal for U.K. pension fund with L&G

DB (U.K.) Pension Scheme, England, insured £570 million ($783 million) in liabilities through a buy-in with Legal & General Assurance Society, a spokesman confirmed. The transaction, the first for the £4.5 billion plan, was structured to allow for further risk transfer deals with Legal & General to be completed on pre-agreed terms when favorable pricing arises. The spokesman said the plan will look to complete further transactions. Lane Clark & Peacock advised the trustees and Deutsche Bank, the plan sponsor, on...

February 17, 2021
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12Feb

UK roundup: £1trn of DB pension risk to be insured by 2031, says Hymans

Recent analysis by Hymans Robertson shows that £1trn (€1.13trn) of risk from defined benefit (DB) pension schemes is expected to have been insured by the end of 2031. The analysis showed that since the pension risk transfer market took off in 2007, buy-ins/buy-outs (£180bn) and longevity swaps (£110bn) have already insured £300bn of risk from DB pension schemes. Further analysis by the consultancy points to an additional £700bn of DB pension scheme risk being insured by the end of 2031, resulting...

February 12, 2021
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