June 2022

The Aging Readiness & Competitiveness Report 2021. Enabling Innovation for Healthcare and Wellness

By AARP As the world enters the UN’s Decade of Healthy Ageing, amid global covid-19 vaccination efforts, the need to increase support for the wellbeing of older adults has never been so clear. Older people comprise a growing share of the global population. This trend will persist over the coming decades, and not just in high-income countries. By 2050 an estimated 80% of older adults will be living in low- and middle-income countries. Yet disparities for older adults are ubiquitous,...

Would the Securing a Strong Retirement Act Secure More Retirement Equity?

By Albert Feuer On March 29, 2022 the House approved H.R. 2954 that is titled the Securing a Strong Retirement Act of 2022 (the SECURE Act 2.0) by a vote of 414-5. On May 26, 2022, a discussion draft of the Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg (RISE & SHINE) Act of 2022 was released by the Senate Health, Education, Labor, and Pensions Committee Chair Senator Patty Murray (D-WA), and Ranking Member Senator Richard...

US. Growing Inclusion of Alts in DC Plans

For defined contribution plan sponsors, alternative investments have become increasingly common. Mega plans—with assets in the billions and hundreds of millions—were historically more likely to include alternatives such as core private real estate. The asset class was most prevalent among large corporate plans, but that has evolved, explains Jani Venter, executive director, defined contribution fund management, real estate Americas at JP Morgan. “Historically, it’s been large corporate and public plans with custom structures that made the decision to include real estate,...

That Social Security Income Replacement Cliff Could Hurt

Social Security will keep paying retirement benefits in 2035, even if its trust fund empties out, but the cut in the amount would be huge. That’s the assessment of Alicia Munnell, director of the Center for Retirement Research at Boston College. Munnell, one of the top academic retirement researchers in the world, says Social Security should receive enough payroll tax revenue to pay 80% of the currently promised benefits from current income in 2035, and about 74% of the promised benefits...

Russia sanctions will hit US pensions

The Pacific Investment Management Co. (Pimco) has warned the U.S. Treasury Department about the fallout to investors from the strict sanctions that are pushing Russia toward default. Executives at the asset management giant told the U.S. Treasury that U.S. pension funds will face losses if fund managers are forced to write down their Russian holdings, according to people familiar with the matter. They also made the point that a Russian default would allow President Vladimir Putin to keep foreign currency...

US. BlackRock offers feedback to SEC on climate-risk disclosure proposal

BlackRock, which embraces climate-conscious investing and is pushing other companies to do the same, still supports the rules proposed by the SEC requiring climate-related disclosures from public companies. But the money manager has some notes for the regulator. In a June 17 letter to the SEC, BlackRock reiterated its belief that "climate risk is investment risk" and that related disclosures aligned with the Task Force on Climate-related Financial Disclosures framework should be mandated. However, the firm does not agree with...

US. Rising interest rates make it trickier to choose between a lump sum or an annuity

About 15% of private-sector workers have access to a traditional pension, which they often are able to take as a lump sum instead of an annuity. For anyone edging close to a retirement date, be aware that the higher the interest rate used to calculate a lump sum, the smaller the amount. On the other hand, pension annuities typically do not come with cost-of-living adjustments, making them susceptible to inflation risk. Here’s what to know. When you’re nearing retirement and are due a...

US. Younger Boomers May Outlive Their 401(k) Savings

Baby boomers are not renowned for their frugality, having grown up in an era of rapid economic growth, mass consumerism and a feeling that the money faucet will never turn off. In retirement, however, the money can run out — a risk some boomers face as they spend their way too quickly through their retirement accounts, according to a new study from the Center for Retirement Research at Boston College. That risk is particularly big for younger boomers whose careers...

US. Senate Version of SECURE 2.0 Set to Move Forward

The Senate version of SECURE 2.0, titled the “Enhancing American Retirement Now (EARN) Act,” is scheduled for mark up Wednesday morning. The news comes two weeks after Senators Patty Murray, D-Wash., and Richard Burr, R-N.C., introduced a SECURE 2.0-like bill titled the “Retirement Improvement and Savings Enhancement to Supplement Healthy Investments for the Nest Egg (RISE & SHINE) Act.” “Americans deserve dignified retirements after decades of hard work, and our bill is an important step forward,” Senate Finance Committee Chair Ron...

US. PennPSERS commits $350 million to alts

Pennsylvania Public School Employees' Retirement System, Harrisburg, approved two new alternative commitments totaling up to $350 million. The $75.9 billion pension fund's board at its June 17 meeting approved commitments totaling up to $250 million to GCM U.S. Partnership Opportunities, a private infrastructure fund managed by GCM Grosvenor, and up to $100 million to venture capital fund Greenoaks Capital Opportunities Fund V, spokeswoman Evelyn M. Williams said in an email. Penn PSERS previously committed up to $100 million to Greenoaks Capital...