May 2021
13May

US. Pension Funds Are Desperate to Cut Costs, but Consolidation Isn’t the Answer

Public pension funds that merge with their peers have historically hailed it as a smart way to cut costs and achieve economies of scale. But the strategy of consolidating funds, particularly for large ones, is not yielding the benefits it once once did, new research shows. In fact, for some funds, the economies of scale they are achieving is “rather mediocre,” according to a paper published this month by researchers Jacob Antoon Bikker and Jeroen Meringa from De Nederlandsche Bank, the...

May 13, 2021
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13May

US. Strong Stock Market Boosts 401(k) Investors’ Equity Exposure

A surging stock market, coupled with slow and steady trades into equities, brought 401(k) investors in April to their highest level of equity exposure since 2001, according to the Alight Solutions 401(k) index. During the month, nearly all the trading days favored equities over fixed income; four days favored fixed income funds, and 17 days favored equity funds. Also of note was the fact that April has no days of above-normal trading activity. The average net trading activity was a mere...

May 13, 2021
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12May

US. In Reversal, Retirements Increased During the Pandemic

After decades in which it decreased, the retirement rate rose during the pandemic, according to the latest government data. This makes retirement one exception to the many ways that the pandemic accelerated pre-existing trends, such as toward suburbanization and online shopping. In the year since the pandemic started — the 12 months ending in March 2021 — 17.0 percent of Americans aged 55 to 64 were retired, up from 16.8 percent in the two previous years. But this is still...

May 12, 2021
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11May

US. Public pensions won’t earn as much from investments in the future. Here’s why that matters

State pension systems dropped the rate of return they assume for their investment portfolios again, continuing a two-decade long trend that public-finance experts say is necessary, even as it presents some challenges for the entities that participate in such plans. The median assumed return in 2021 is 7.20%, according to a report published early in May by the National Association of State Retirement Administrators, down roughly 1 percentage point since 2000, as the investment managers charged with managing trillions of...

May 11, 2021
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10May

US. How Mass Retirement Is Affecting the Bond Market

Public work is a different ballgame, but in the private sector, defined benefit pensions have largely been replaced by 401(k) plans. However, there's still a massive amount of pension liabilities floating around in the market, and with mass retirement setting in, how those funds are managed can affect retirees everywhere – regardless of work history. Read also US. Biden’s $86 Billion Pension Rescue Set to Boost Corporate Bonds “There remains $1.8 trillion in assets in the largest 100 public companies’ pension...

May 10, 2021
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07May

A Third Of Seniors Seek To Work Well Past Retirement Age, Or Won’t Retire At All, Poll Finds

More Americans plan to work past the age of 70 – or never retire at all – according to a survey released Thursday by reverse mortgage lender American Advisors Group, suggesting the pandemic prompted many aging Americans to rethink their retirement strategies in order to maintain their living standards. Almost half (46%) of the more than 1,500 Americans aged 60 to 75 surveyed by AAG said they plan to work part-time after they retire from full-time work. Nearly one-fifth (18%) of...

May 7, 2021
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06May

S&P 1500 Pension Funded Status Increased by 1 Percent in April

By Mercer The estimated aggregate funding level of pension plans sponsored by S&P 1500 companies increased by 1 percent in April 2021 to 96 percent as a result of an increase in equity markets, slightly offset by the decrease in discount rates. As of April 30, 2021, the estimated aggregate deficit of $102 billion USD decreased by $16 billion USD as compared to $118 billion USD measured at the end of March according to Mercer,[1] a global consulting leader and...

May 6, 2021
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06May

U.S. corporate pension funding inches up in April – 3 reports

Funding ratios for U.S. corporate pension plans increased in April, according to reports from Wilshire Associates, Legal & General Investment Management America and Mercer. All three firms noted strong equity markets as the primary driver for the increases, partially offset by a decrease in discount rates leading to rising liability values. Wilshire's monthly report said U.S. corporate pension plans' aggregate funding ratio rose 0.6 percentage points to 92.9% in the month ended April 30. The change was the result of a...

May 6, 2021
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06May

US birth rate falls 4% to its lowest point ever

The American birth rate fell for the sixth consecutive year in 2020, with the lowest number of babies born since 1979, according to a new report. Some 3.6 million babies were born in the US in 2020 - marking a 4% decline from the year before, found the US Centers for Disease Control and Prevention (CDC) National Center for Health Statistics. The slump was seen across all recorded ethnicities and origins, according to the findings. The national picture mirrors a decline in...

May 6, 2021
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04May

Surging Stocks Improve Pension Funding Levels, But De-Risking Isn’t at Risk

A strong stock market delivered the goods and then some for pension funding levels, both public and corporate, in the first quarter. But don’t expect companies to pull back from their campaign to shift into safer (if low-paying) bonds from stocks. That’s the conclusion from JPMorgan’s global market strategy team, which noted in a report that this development didn’t mean that corporate plans would ease up on their de-risking—that is, moving into bonds from stocks. Reason: Company defined benefit (DB)...

May 4, 2021
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