August 2022
04Aug

U.S. corporate pension plan funding holds steady in July above 93% – 3 reports

U.S. corporate pension plan funding ratios remained relatively stable in July after months of poor investment returns had negatively affected the health of the plans, according to three new reports. Legal & General Investment Management America in its report estimated the average funding ratio of the typical U.S. corporate pension plan rose to 95% as of July 31 from 94% a month earlier. LGIMA in its latest Pension Solutions Monitor cited positive equity returns during the month, noting the S&P 500...

August 4, 2022
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02Aug

US. Average Public Pension Assumed Rate of Return Hits 40-Year Low

The average investment return rate assumption for U.S. public pension funds has fallen below 7.0%, to its lowest level in more than 40 years, according to the National Association of State Retirement Administrators. Among the 131 funds that NASRA measured, more than half have reduced their investment return assumption since fiscal year 2020 as rising interest rates and other factors have contributed to more volatile investment returns. For the 30‐year period that ended in 2020, public pension funds accrued approximately $8.5...

August 2, 2022
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01Aug

U.S. 6-month period brings financial storm for many

Defined contribution money managers, like their plan sponsor clients and the millions of U.S. workers who save for retirement with them, are navigating a much different world in mid-2022 than they did at the end of 2021. "Certainly, these six months have been very different than last year and the year before, which is really quite a statement when you think that in the last two years we were in the middle of a pandemic," said Anne F. Ackerley, New...

August 1, 2022
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July 2022
29Jul

U.S. pension promises will go unmet without sweeping reform

This year, anybody receiving an annual statement from America’s mighty social security system might notice a tiny ticking time bomb — if they possess sharp eyes. Tucked into a footnote is a website link that explains that the two funds in this system — called “Disability Insurance” and “Old Age and Survivors Insurance” — have $2.9tn to plug the shortfall between expected payouts and what is gathered each year from payroll taxes. Those trillions sound soothingly big. But they are...

July 29, 2022
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28Jul

The 2022 BlackRock Read on Retirement

By BlackRock Retirement savings isn’t always an even playing field, but as an industry we can seek better outcomes. That’s why we’ve reimagined our DC Pulse survey to provide a more accurate “Read on Retirement” and what it means for more and more people. The pandemic caused people to rethink what they need for retirement, and inspired employers to offer more strategies to help employees save for the short and long-term. Yet not everyone has access to a workplace plan, and...

July 28, 2022
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28Jul

Wait Your Turn: Pension Incentives, Workplace Rules and Labor Supply Among Philadelphia Municipal Workers

By David McCarthy & Po Lin Wang Little academic work has examined the labor supply response to pension incentives at the intensive margin. We explore this issue using individual-level administrative and pension data for Philadelphia city employees, where workers have some choice about whether or not to perform overtime, which is pensionable. We document large variation across workers in the incentives to do overtime provided by pension rules. Although standard regressions show that worker overtime is positively associated with own...

July 28, 2022
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28Jul

U.S. House Votes to Restore Delphi Corp Salaried Pensions

The U.S. House of Representatives on Wednesday voted 254-175 to pass legislation that would restore the pensions of 20,000 salaried retirees of Delphi Corp., of which more than 5,000 live in Ohio. It’s the brightest sign yet for those workers whose pensions were assumed by the Pension Benefit Guaranty Corp. in 2009 when General Motors was steered through bankruptcy by the Obama Administration. The measure now moves to the U.S. Senate, which may take up the bill as early as today. Under...

July 28, 2022
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27Jul

US. Gen Z is stashing away 14% of income for retirement — more than older generations, study shows

Young adults may be hearing the save-for-retirement drumbeat loud and clear, a new study suggests. Generation Z workers — defined in the study as those ages 18 to 25 — are socking away, on average, 14% of income for their golden years, according to new research from BlackRock. That compares with 12% for their older counterparts: millennials (ages 26-42), Gen Xers (ages 43-55) and baby boomers (ages 56 to 75). At the same time, the total share of Americans who think...

July 27, 2022
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26Jul

US. ‘True Cost of Aging’ index shows many seniors can’t afford basic necessities

Each month, Seeley, a retired teacher, gets $925 from Social Security and a $287 disbursement from an individual retirement account. To make ends meet, she’s taken out a reverse mortgage on her Portland, Maine, home that yields $400 monthly. So far, Seeley has been able to live on this income—about $19,300 a year—by carefully monitoring her spending and drawing on limited savings. But should her excellent health worsen or she need assistance at home, Seeley doesn’t know how she’d pay...

July 26, 2022
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26Jul

US. Milliman: Pension risk transfer premiums increase slightly in June

Estimated average pension risk transfer premiums rose slightly in June, but the average rate among the most competitive bidding processes fell by 30 basis points, a study by Milliman showed. The estimated buyout cost as a percentage of accounting liabilities, or accumulated benefit obligations, was 103% as of June 30, up from 102.5% as of May 1, according to the Milliman Pension Buyout index. However, the average of the most competitive annuity purchase rates fell by 30 basis points to 98.3%...

July 26, 2022
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