July 2021
16Jul

Reverse Mortgages

By Consumer Financial Protection Bureau A reverse mortgage is a special type of home loan for older homeowners that requires no monthly mortgage payments. Borrowers are still responsible for property taxes and homeowner’s insurance. Reverse mortgages allow seniors to access the equity they have built up in their homes now, and defer payment of the loan until they die, sell, or move out of the home. Because there are no required mortgage payments on a reverse mortgage, the interest is...

July 16, 2021
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16Jul

Public Pension Design and Household Retirement Decisions: A Comparison of the United States and Germany

By David Knapp, Jinkook Lee, Maciej Lis and Drystan Phillips Social Security provides retirement benefits to age-eligible workers and their spouses. Benefits are permanently increased if initial receipt is delayed. For benefits paid to spouses, these incentives reflect a complex interaction of the worker’s and spouse’s earnings histories, benefit claiming decisions, and age difference. We demonstrate that the benefit increment from delaying initial receipt of spousal and survivor benefits is substantial for some households. Past studies find that workers respond...

July 16, 2021
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16Jul

Private Retirement Systems and Sustainability: Insights from Australia, the UK, and the US

By Nathan Fabian, Mikael Homanen, Nikolaj Pedersen & Morgan Slebos Retirement system sustainability is defined as the ability of plan boards and managers to be responsible investors, active stewards, and allocators of capital to economic activities with desirable social and environmental outcomes. In this paper, we examine the policy frameworks and important structural variables pertinent to private retirement systems in Australia, the UK, and the US. By analyzing various reports, interviewing experts, and using data from the Principles of Responsible...

July 16, 2021
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15Jul

US. How Benchmarks Keep Pension Stakeholders in the Dark

There’s no shortage of studies arguing that pension funds and endowments would have been wise to put the kibosh on their complex portfolios and opt for a simple passive strategy over the last five, 10, or 20 years. But new research from Richard Ennis, one of the founders of investment consultant EnnisKnupp, details another fault line in the argument. Benchmarks in investing, just as in sports or healthcare, are designed to measure performance, costs, risk, and other data points against peers...

July 15, 2021
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14Jul

He runs the worst-funded public pension in the country. Here’s his ‘good news’ story

It’s a safe bet that many people, seeing their work described in print as “among the worst in the country,” might cringe and try to avoid the media. But David Eager has spent the past five years running the Kentucky Public Pension Authority, with an eye to turning the system around. A big part of his work has been increasing transparency and educating people about the nitty-gritty of public pensions, how Kentucky got into the mess it’s in, and how...

July 14, 2021
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12Jul

Lack of climate risk analysis in US federal retirement fund sparks concern

The board overseeing the largest public retirement plan in the United States has not comprehensively assessed the risks climate change poses to its investments, a U.S. federal agency says, sparking fears retirement savings pots could be at risk. Read also US. How Benchmarks Keep Pension Stakeholders in the Dark The Federal Retirement Thrift Investment Board (FRTIB) says its investment strategies already price in such risks to its portfolio as they track broader indices of companies coming under new pressure to disclose...

July 12, 2021
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02Jul

Pension Funding Index June 2021

By Zorast Wadia and Charles J. Clark The Milliman 100 PFI funded ratio increases to 98.8% as investment gains counter the effects of discount rate decreases The funded status of the 100 largest corporate defined benefit pension plans increased by $8 billion during May as measured by the Milliman 100 Pension Funding Index (PFI). As of May 31, the deficit improved to $21 billion from $29 billion at the end of April due to strong investment performance. The funded status improvement...

July 2, 2021
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02Jul

US. Public Retirement Benefits Not What They Used to Be

Defined benefit (DB) pension plans are a valuable benefit for employees—offering the option of guaranteed retirement income that is lacking in most defined contribution (DC) plans. Some private-sector employees have been envious of the pension benefits provided to public-sector employees. Over the years some outsiders have even argued that public pensions are too generous, perhaps without understanding that many public employees are required to put a significant percentage of their own pay into the plans. And there has been misunderstanding...

July 2, 2021
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01Jul

US. Now Is The Time To Re-Think Retirement Plan Conventional Wisdom

Retirement plan design can make or break an employee’s ability to maintain their standard of living in retirement. Over the past several decades, many private sector companies implemented a complete overhaul in retirement plan design, shifting from defined benefit pensions to 401(k)-style defined contribution accounts. Originally designed to supplement rather than replace pensions, 401(k) plans have become the primary employer-sponsored plan for many U.S. workers. This transition meant sacrificing a number of important features of pension plans and economic efficiencies....

July 1, 2021
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June 2021
29Jun

US. GAO Studied Retirement Plan Climate Change Risk Assessments

The agency recommended that the Federal Retirement Thrift Investment Board (FRTIB) evaluate the risk of climate change on the Federal Thrift Savings Plan (TSP)'s investment offerings. The Government Accountability Office (GAO) has recommended that the executive director of the Federal Retirement Thrift Investment Board (FRTIB) evaluate the Federal Thrift Savings Plan (TSP)’s investment offerings in light of risks related to climate change. Read also US. Now Is The Time To Re-Think Retirement Plan Conventional Wisdom “Climate change is expected to affect financial...

June 29, 2021
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