April 2020

20Apr

Ireland. Concern growing as social welfare budget nears breaking point

Concern is growing across Fianna Fáil and Fine Gael over the capacity of the Department of Social Protection to continue to fund the cost of the coronavirus shutdown without an emergency estimate. The scale of the fiscal challenges are so steep one senior Government source warned: ‘The cost of dealing with coronavirus and its impact, especially on the Social Protection budget, may compel Fine Gael and Fianna Fáil to escalate the process of government formation.’ Fianna Fáil and Fine Gael are...

April 20, 2020
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17Apr

Australia’s Morrison Wants Pensions to Fund Company Bailouts

Australia’s Prime Minister Scott Morrison wants the nation’s pension funds to take more action to cushion the blow from the coronavirus crisis. In an interview with the Australian Broadcasting Corporation’s 7:30 program Thursday night, Morrison said the nation’s A$2.95 trillion ($1.9 trillion) pension pot should be used to bail out companies as the government “is not the only economic actor in this event.” “I’d like to see the industry and broader superannuation funds playing a more active role in...

April 17, 2020
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17Apr

Milliman analysis: Public pensions hammered by COVID-19 economic volatility, shedding $419 billion in market value in Q1

Milliman, Inc., a premier global consulting and actuarial firm, today released the first quarter 2020 results of its Public Pension Funding Index (PPFI), which consists of the nation's 100 largest public defined benefit pension plans. During Q1 2020, the overall funded ratio for these plans suffered the single largest quarterly drop in the history of the PPFI, decreasing from 74.9% to 66.0% between Jan 1 and March 31. Economic volatility from the COVID-19 pandemic resulted in a $419 billion...

April 17, 2020
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16Apr

Pension pots around the world during COVID-19

Governments around the world are springing into action to leverage and safeguard pension pots during the COVID-19 economic and market turmoil. Australia in March allowed workers to withdraw $10,000 for this financial year and the next from their superannuation savings if their employment has been affected by COVID, in a move that was panned by the opposition and industry funds lobby. Australia is not the only country to allow early access to retirement savings during COVID-19 - the United States...

April 16, 2020
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02Apr

How the coronavirus threatens Asia-Pacific’s $7tn pensions market

The coronavirus outbreak has piled pressure on Asia-Pacific’s multitrillion-dollar pensions industry, with the pandemic raising fears that retirees could make a panicked dash to withdraw their investments. Read also Dutch pension funds invest in coronavirus bond The sector manages about $7tn in assets, according to research group the Thinking Ahead Institute. But investment funds and policymakers across the region have been forced to reassess how they provide for ageing populations. Read also Kenya’s retirement benefits eroded by coronavirus The challenges come...

April 2, 2020
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01Apr

U.S. Pension Funds May Pour $400 Billion Into Stocks, Lifting Virus-Hit Markets: JP Morgan

U.S. pension funds that delayed rebalancing their portfolios are likely to pump about $400 billion into stocks over the next two quarters, analysts at JP Morgan said, providing a potential boost to equity markets battered by the coronavirus pandemic. Weeks of asset price volatility may have pushed some fund managers to postpone rebalancing portfolios where equity allocations have been knocked out of whack by a sharp decline in stocks, the bank said in a note to investors. The S&P...

April 1, 2020
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March 2020

27Mar

US. Stimulus deal includes temporary relief for retirement plans

Historic legislation would also ban companies’ use of aid to buy back stock. The Senate approved on Wednesday a roughly $2 trillion economic stimulus package for affected companies and workers that also provides some temporary relief for retirement plan sponsors and participants. Final approval is expected Friday in the House of Representatives, where House Speaker Nancy Pelosi said Wednesday she expected to debate the measure on the floor. Defined benefit plan sponsors gained a one-year holiday from making their 2020 contributions, but...

March 27, 2020
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24Mar

US. Pension Plan Funding Relief Needed ASAP

Last week, in a throwaway line in an article on multiemployer pensions, I considered it something of a given that, following a script similar to the 2008 crisis, Congress would provide “funding relief” to single-employer pension plan sponsors, allowing them to defer contributions to their pension plans which would otherwise be substantially elevated, and that it was multiemployer plans, with their pre-existing funding challenges, that faced greater difficulties. Unfortunately, that isn’t quite right. Single-employer plans are facing their own...

March 24, 2020
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February 2020

10Feb

Deal reached to cut bankrupt Puerto Rico’s debt by $24 bln

Puerto Rico would shed about $24 billion of debt and move closer to exiting bankruptcy under an agreement with bondholders announced on Sunday by the U.S. commonwealth's federally created financial oversight board. The deal would cut $35 billion of bonds and claims to about $11 billion as it increases the ranks of general obligation (GO) and Public Buildings Authority (PBA) bondholders that signed onto a plan to restructure core government debt and more than $50 billion in pension obligations...

February 10, 2020
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07Feb

The pension crisis of Latin America

The privatisation of the pension fund system in Latin America was hailed as one of the most important developments of the 1990s. A major challenge for developing countries is the lack of local savings. By definition, developing countries are in transition. They need a great deal of capital to modernise their infrastructure and improve their workforce through better education and health systems. This left most countries highly dependent on international capital flows. The problem is that international capital flows...

February 7, 2020
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