July 2020

15Jul

US. Post-pandemic Retirement: Can We Build More Resilient Systems?

Reforming retirement systems is a more urgent imperative globally as the coronavirus pandemic claims jobs, lowers economic growth and investment returns, and threatens to choke funding for already underfunded pension plans. The pandemic is also hastening the imminent insolvency of the Social Security Trust Fund in the U.S., a recent report by the Penn Wharton Budget Model has found. In two recession scenarios the report laid out, the trust fund would run out of money in 2032 or 2034...

July 15, 2020
News, Slider, , , ,
Read more...
14Jul

US. Milliman analysis: Corporate pension funded ratio at 83.7% in June as discount rate hits historic low

Milliman, Inc., a premier global consulting and actuarial firm, today released the results of its latest Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans. Despite solid investment returns, June's PFI funded status worsened by $6 billion due to an 11 basis point drop in the monthly discount rate, from 2.76% in May to 2.65% for June. This month's discount rate marks the lowest observed in the 20-year history of the Milliman PFI. The PFI...

July 14, 2020
News, Slider, ,
Read more...
13Jul

US. Public pension funds in an era of low rates and COVID-19

What is the most prudent strategy for state and local governments confronting low returns on pension investments, aging workforces, and pressure to build portfolios large enough to cover promised future benefits at the same time that these governments face other pressing demands? Presentations at the 2020 Municipal Finance Conference provide contrasting answers to this question. Louise Sheiner and Finn Schuele of the Hutchins Center at Brookings with co-authors Byron Lutz of the Federal Reserve Board and...

July 13, 2020
News, Slider, , , ,
Read more...
09Jul

Trump’s Plan to Block Pensions From ESG Won’t Help Fossil Fuels

The U.S. Department of Labor is concerned that America’s pension fund managers don’t know what they’re doing. Read also US. Public Pensions and the COVID-19 Fiscal Dilemma That’s the rationale, at least, for the department’s newly proposed rule restricting the use of environmental, social, and governance considerations in investment decision-making. The language reaffirms the standard interpretation of fiduciary guidelines that only financial risks and returns can be considered in the management of U.S. employer-provided pension funds; “non-pecuniary goals,” for...

July 9, 2020
News, Slider, , , , ,
Read more...
09Jul

US, Canadian Pension Funds Rebound with Markets in Q2

The funded status of the largest US corporate pension plans and Canadian defined benefit (DB) pension plans rebounded during the second quarter as resurgent equity and bond markets offset liability increases from falling interest rates. The funded status for the pension plans for 366 Fortune 1000 companies that sponsor US defined benefit pension plans increased to 82% as of June 30, from 79% at the end of the first quarter, but below the 87% at the end of 2019,...

July 9, 2020
News, Slider, , ,
Read more...
08Jul

Covid-19: Don’t Mess With My Retirement

We’ve heard a lot lately about how the Covid-19 pandemic is dramatically disrupting the retirement preparations of tens of millions of working Americans. Being furloughed from work or having your small business fail is causing people to dip into savings and interrupts putting money aside toward retirement. Those closest to retiring can be in the biggest bind, and many are choosing to delay retirement to fill their growing financial gap. But how is the pandemic affecting folks who are...

July 8, 2020
News, Slider, , , ,
Read more...
07Jul

US. Public Pensions and the COVID-19 Fiscal Dilemma

We've just passed an annual day of reckoning in public finance: Most states and many local governments close their books for the fiscal year on June 30, and public pension funds typically report their quarterly portfolio balances shortly thereafter. With the Senate still dithering over federal stimulus aid to state and local governments, after its majority leader suggested that state bankruptcies would be a better solution and that it's all the fault of public pensions, it's time to reality-check...

July 7, 2020
News, Slider, , , ,
Read more...
02Jul

US. Manager of $240 billion pension fund says the market is absurd – he’s selling stocks

The manager of one of the country’s biggest pension funds said Wednesday that he wants to be underweight in stocks for the rest of the year because of the massive swing in markets so far in 2020. Christopher Ailman, the chief investment officer for CalSTRS, said on CNBC’s “Worldwide Exchange” that the first half of 2020 was the most difficult stretch for the market he had ever seen, calling the moves in stocks “utterly absurd.” “The stock market...

July 2, 2020
News, Slider,
Read more...
01Jul

US. Labor Department Proposes Fiduciary Exemption for Retirement Plans

The Labor Department proposed a new rule Monday for retirement accounts that allow brokers and other types of financial advisers to provide fiduciary advice and still receive commissions in some cases. Read also US. Coronavirus puts company match under pressure Consumer advocates say the proposed regulation would weaken standards under the federal law that governs retirement accounts. Read also UK. Pension funds covering £3trn pressured on fossil fuel investments and net-zero alignment Read more @WSJ

July 1, 2020
News, Slider, ,
Read more...

June 2020

29Jun

US. Coronavirus puts company match under pressure

For the employers that suspended or reduced their matches in defined contribution plans, the coronavirus — which caused the economic havoc leading to cost-cutting — also looms over their efforts to reinstate these benefits. "If companies can bring back the match, they will," said Gregg Levinson, the Philadelphia-based senior director of retirement at Willis Towers Watson PLC. However, a new survey by his firm, conducted during the first half of June, shows that bringing back the match could take...

June 29, 2020
News, Slider, , ,
Read more...