June 2021
04Jun

Central Falls’ Bankruptcy and the Principle of Shared Pain

By James Tatum The small city of Central Falls, Rhode Island filed for Chapter 9 bankruptcy in 2011, with five other cities. The case could have easily been overshadowed by the insolvency of other sizable jurisdictions. Instead, Central Falls’ case is particular in both the treatment of bondholders and pensioners – one class of creditors was completely protected, while the other suffered deep cuts. The purpose of this article is to examine the method used to distribute losses in Central...

June 4, 2021
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03Jun

US. Pension risk transfer premiums hit record low – paper

Pension risk transfer premiums are lower than ever, according to a paper from pension risk consultant BCG Penbridge. The consultant was involved in 53 PRT transactions in 2020, involving the purchase of group annuity contracts by U.S. corporate pension plans to transfer a certain number of retirees and pension liabilities to one or more insurers. Among those transactions, 42 were full plan terminations, and the average premium was 101%. Among the 11 PRT transactions that involved retiree liftouts, the average premium was...

June 3, 2021
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03Jun

US. 401k Savings, Account Balances Grew During Pandemic

Closed restaurants and movie theaters meant more disposable income for retirement savings during the pandemic. T. Rowe Price is out with its annual Reference Point 401k benchmarking report featuring year-over-year data and analysis on participant behavior and plan design, and the results were positive, all things considered. “While the financial, physical, and emotional strains caused by the pandemic had, and will continue to have, repercussions on plan design and retirement savings outcomes, it was encouraging to see that through it all,...

June 3, 2021
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May 2021
28May

US. Market Rebound Spurs Record 33.55% Return for NY State Pension Fund

The New York State Common Retirement Fund (NYSCRF) reported a 33.55% investment return for the fiscal year ending March 31, the largest one-year investment return in the fund’s history. It easily beat its long-term expected rate of return of 6.8%. Read also US. New York City Pensions to Fund $250 Million Apartment Venture The performance, which reflected the financial markets’ rebound from last year’s market crash after the COVID-19 pandemic first hit, raised the fund’s asset value to an estimated $254.8...

May 28, 2021
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27May

US. One Way To Promote Financial Literacy: Teach How The Scammers Work

In a nation more deeply divided than ever about every conceivable issue, a broad consensus has surprisingly emerged that financial literacy is broadly lacking and the need for a financial education for every American is urgent. President Biden recently issued a proclamation deeming April 2021 as National Financial Capability Month. This communication emphasizes the benefits of financial capability, the value of financial literacy, and the importance of access to financial resources. So why is financial literacy attracting such attention? Americans today...

May 27, 2021
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26May

How Far Could Pension Funds Drive Sustainable Investing?

Pension funds could be a formidable force in getting companies to embrace environmental, social, and governance (ESG) values such as combating climate change or advancing employment equity. Yet they must align those goals with their fiduciary duty of protecting the retirement funds of their members. In the U.S., they must also overcome challenges including gaps in ESG adoption metrics and ambiguity about government rules on such investing. Those were the key takeaways from a two-day conference organized by Wharton’s...

May 26, 2021
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26May

The Future of Public DC Programs Includes a Focus on Financial Wellness

There is a movement among private-sector employers to offer not just a retirement plan, but a program of benefits that addresses all aspects of employees’ finances. But employees in the public sector—including those in public defined contribution (DC) plans—need holistic financial wellness help, too. Less than half of public-sector employees (43%) feel very/extremely confident making financial decisions on their own, according to the results of a 2019 study by the Center for State and Local Government Excellence (SLGE). Fifty-four percent...

May 26, 2021
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26May

US. Forensic Investigation Of Chicago Police Pension Fund Underway

The Chicago Policemen’s Annuity and Benefit Fund (PABF) —commonly referred to as the Chicago Police Pension Fund—is one of the worst funded public pension plans in the United States today, with a funding ratio of only 23 percent. A group of retired and disabled officers, along with widows, has long questioned the trustees and management of the struggling pension. Dissatisfied with the responses they received, the group formed the CPD Pension Board Accountability Group. Funds were raised to commission an independent...

May 26, 2021
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25May

US. New York City Pensions to Fund $250 Million Apartment Venture

For New York City’s pension funds, there’s no time like now to invest in new apartments. The two largest retirement systems -- covering public school teachers and municipal employees -- are teaming up with developer Hudson Cos., to allocate $250 million for construction of middle-income housing in the city and surrounding suburbs, the developer said. The pensions will commit $243.75 million of that equity, which will be leveraged to build as many as 10 projects or 2,000 units, said Joe Riggs,...

May 25, 2021
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21May

US. Biden orders federal climate-risk financial strategy, with implications for homeowners, pensions and government contracts

President directs agencies to analyze and mitigate the risk climate change poses to the financial system, and he’ll use the findings in the budget process. President Joe Biden is mandating a federal government strategy to quantify climate-change risks to public and private financial assets. Banking, housing and agriculture regulators are among those who will be asked to use climate risk in their supervision of major industries, including the lending of federal funds and decisions on federal contracts. Some Department of Labor-regulated...

May 21, 2021
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