June 2020
08Jun

US. The Reason COVID-19 Might Destroy 22% of Workers’ Retirement

Ever since U.S. cases of COVID-19 started multiplying back in March, the economy has been in shambles. Millions of workers have lost their jobs, while countless small businesses have closed their doors, perhaps forever. With so many people desperate for money, it's clear that a relief package was necessary, and so in March, lawmakers passed the CARES Act. Perhaps the most popular feature of the CARES Act was the $1,200 stimulus payment it produced, but another notable feature is...

June 8, 2020
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08Jun

US. Why you may wind up relying more on social security in retirement than you expect to

The median amount that U.S. workers have saved for retirement is just $50,000, according to a recent report from the Transamerica Center for Retirement Studies. Even among baby boomers -- the generation that is currently in the midst of retiring -- the median worker only has about $144,000 socked away. For many, that amount of money likely will be depleted after just a few years in retirement. Fortunately, Social Security benefits will provide retirees with a steady income stream...

June 8, 2020
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05Jun

US. Making Sense Of The Supreme Court Ruling On Private-Sector Pensions

A Supreme Court decision this week on employer pensions? Yes, indeed. The ruling itself Earlier this week, the Supreme Court handed down its decision in Thole v. U.S. Bank, a case in which two retirees in the U.S. Bank pension plan contended, as part of a class action, that U.S. Bank had violated its fiduciary duty in mismanaging its pension plan from 2007 to 2010, causing its assets to crash. (See Reason and 401K Specialist for summaries.) The plaintiffs...

June 5, 2020
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05Jun

US. Bill to limit pensions for officials convicted of crimes moves forward

Lawmakers moved to restrict pensions for public officials who commit crimes while performing their official duties. Senate Bill 719 passed unanimously from the House Pensions and Retirement Committee on Wednesday. It targets elected government officials convicted of a felony offense connected with their service. Convicted officials could collect only the amount of money they contributed to the retirement system plus interest. Nor could they count unused sick leave accumulated after July 2007 toward their retirement benefits. The bill won’t...

June 5, 2020
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04Jun

U.S. clears private equity as investment option for retirement plans

The U.S. Department of Labor issued guidance on Wednesday that allows private equity investments to be offered to U.S. retirement plans as part of diversified investment funds, a move that the leveraged buyout industry has long called for. Employee-sponsored defined benefit plans, such as the pension funds of public sector workers, have long been allowed to include buyout funds in their investment portfolios, turning private equity into a multi-trillion-dollar industry. Read also US pension plans warned they will run...

June 4, 2020
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01Jun

US pension plans warned they will run out of money by 2028

The weak financial condition of seven US public pension plans threatens to deplete their assets by 2028, leading to severe risks for the living standards of thousands of American employees and retired workers. Many US public pension plans had not fully recovered from the 2007/08 financial crisis before coronavirus struck, triggering turmoil across financial markets. The correction in the US stock market has increased the long-term structural problems across the entire US public pension system, particularly for the weakest...

June 1, 2020
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May 2020
29May

Allianz pension report 2020 the silver swan

By Allianz Even before the Covid-19 outbreak, societies were becoming more and more fragmented over several social fault lines: culture, education, wealth, place of residence. Many of these overlap: The cosmopolitan, well-educated, wealthy people live in (big) cities, whereas more conservative, low-skilled workers tend to live in the periphery. There is, however, one important social fault line that cuts through all these identities: the generation gap. With demographic and climate change (and now the coronavirus pandemic), the generational...

May 29, 2020
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28May

The Game of Pension Risk Transfers Continues

fsi Many employers with defined benefit pension plans would love to put responsibility for the plans in the hands of a life insurer, by buying a large group annuity contract. Predictions about how the current COVID-19, stock price and interest rate turmoil will affect the market for pension risk transfer annuities are… highly diverse. The life insurers in the market say demand is strong. Analysts at Moody’s Investors Service say big pension risk transfer units could help buffer...

May 28, 2020
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27May

US. The Federal Employee Retirement Plan Should Add, Not Delete Chinese Stocks

By Ric Edelman Never mix investing with politics, as I wrote in my bestselling book, The Truth About Retirement Plans and IRAs. Sadly, for millions of American public servants, the board that controls their $600 billion retirement savings plan just did. The Federal Retirement Thrift Investment Board just halted its plans to include Chinese stocks in the Thrift Savings Plan, the 401(k) equivalent for federal employees and members of the military. First, some background. The TSP has five core...

May 27, 2020
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22May

US pension funds approach point of no return

The issues facing public pension funds in the US are widely known, and while it's not clear how exposed to the recent market correction funds were, analysis from Wirepoints of 2018 data shows some may have reached the point of no return. Looking at asset-to-payout ratios of 148 state and local pension funds with more than US$2 billion in assets, the worst-off funds are those that are already well known for their pension shortfalls. These are in Kentucky, Illinois,...

May 22, 2020
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