December 2020

11Dec

US. 4 Public Pension Funding Strategies Besides Employer Contributions

Maybe it’s time for pension plans to explore other funding strategies aside from public employer contributions. Plan sponsors typically use the annual required contribution (ARC) or the actuarially determined employer contribution (ADEC) to meet public pension liabilities. But a number of states have found success experimenting with lesser-known methods. It could be useful for other public retirement programs to consider these strategies, according to a report released this week from the National Institute on Retirement Security. While resilient...

December 11, 2020
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10Dec

New York’s $226 Billion Pension Fund Is Dropping Fossil Fuel Stocks

New York State’s pension fund, one of the world’s largest and most influential investors, will drop many of its fossil fuel stocks in the next five years and sell its shares in other companies that contribute to global warming by 2040, the state comptroller said on Wednesday. Read also Exxon Under Pressure From New Activist Fund With $226 billion in assets, New York’s fund wields clout with other retirement funds and its decision to divest from fossil fuels could accelerate...

December 10, 2020
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09Dec

U.S. employers eyeing innovative features for defined contribution retirement plans, Willis Towers Watson survey finds

A majority of U.S. employers are eyeing innovative features for their defined contribution (DC) plans to boost their value, fortify retirement savings and enhance employees’ overall financial wellbeing, according to a survey by leading global advisory, broking and solutions company Willis Towers Watson. The survey also found employer interest in lifetime income options is accelerating as plan sponsors look for ways to help employees generate a steady flow of income in retirement. The 2020 U.S. Defined Contribution Plan Sponsor...

December 9, 2020
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November 2020

25Nov

US. Effect of the Biden Administration on Health and Retirement Benefits

What president- elect Joe Biden´s administration will be able to get done regarding health care and retirement policy will depend much on the political tone in Congress. Control of the Senate is hinging on two Georgia runoff elections in January, notes Geoff Manville, partner and government relations leader in Mercer’s Law and Policy Group. He says most observers believe Democrats will lose one of those races, which would give Republicans Senate control. “That would make it all but impossible...

November 25, 2020
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24Nov

Lack of Financial Literacy May Deter Retirement Plan Participation

The results of a recent survey reveal that most Americans, including retirement plan participants, failed a fluency quiz of key investment selection terms, which can translate into saving less and lower use of investment products. Hearts & Wallets’ “Financial Fluency: What Consumer Understanding of the Language of Finance Means for Advice, Retirement and Asset Management” finds that only 19% of Americans achieved a passing grade when asked to choose the best answer for seven key investment selection...

November 24, 2020
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23Nov

There’s a way to fix the $4.6 trillion U.S. public pensions mess — Canada shows us how

In Ernest Hemingway’s “The Sun Also Rises,” Mike is asked how he went bankrupt. His reply: “Two ways. Gradually, then suddenly.” He might as well be describing the prognosis for many of the nation’s 5,300 public pension funds, which hold $4.4 trillion in assets against what the Federal Reserve estimates to be $9 trillion in liabilities. Most U.S. public pensions plans were in surplus in 2000. Today, based on their own accounting – which differs from that of the...

November 23, 2020
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20Nov

US. Nearly 30 Million Baby Boomers Forced Into Unwanted Retirement

In the third quarter of 2020, roughly 28.6 million Baby Boomers have left the job market and retired, according to the Pew Research Center. The study shows that Covid-19 has contributed to the rapid increase of Boomers—born between 1946 and 1964—being forced out of the labor market. Since the onset of the outbreak, the number of Boomer-aged retirees has increased by about 1.1 million. Over 65 million Americans have filed for unemployment benefits since March...

November 20, 2020
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12Nov

Factors Associated with the Ownership of Individual Retirement Accounts (IRAs): Applying the Theory of Planned Behavior

By Frank Magwegwe Despite the importance of retirement savings, many individuals retire with lack of adequate retirement savings. Applying the Theory of Planned Behavior, we developed a model in which psychological factors influence the calculation of retirement savings needs, which in turn influences the ownership of independent retirement accounts. The results showed that favorable attitudes, strong social norms, and perceived behavioral control are associated with calculating retirement savings needs. Also, calculating retirement savings needs as well as perceived behavioral...

November 12, 2020
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12Nov

US. California’s state pension fund pushes companies to cut their carbon pollution

Almost 2 million Californians receive a pension from CalPERS, the California Public Employees Retirement System. “Because we’re a pension fund, we rely on companies thriving in the economy to generate the returns, and we pay pensions out of that,” says Anne Simpson of CalPERS. She says climate change may put those investments at risk because extreme weather can hurt company profits. And if governments require cuts to carbon pollution, companies reliant on fossil fuels may lose money. “We need...

November 12, 2020
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11Nov

Funded Status of US Corporate Pensions Rises $21 Billion in October

The funded ratio of the 100 largest US corporate pension plans rose to 85.1% from 84.4% in October thanks to a third straight monthly increase in the discount rate, which helped boost the funded status of the plans by $21 billion, according to actuarial and consulting firm Milliman. The aggregate deficit of the plans, as tracked by the Milliman 100 Pension Funding Index (PFI), fell to $285 billion, which is its lowest level since March when it was $243...

November 11, 2020
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