January 2020
03Jan

Impact Investing

By Brad M. Barber, Adair Morse, Ayako Yasuda We document that investors derive nonpecuniary utility from investing in dual-objective VC funds, thus sacrificing returns. Impact funds earn 4.7 percentage points (ppts) lower IRRs ex post than traditional VC funds. In random utility/willingness-to-pay (WTP) models investors accept 2.5-3.7 ppts lower IRRs ex ante for impact funds. The positive WTP result is robust to fund access rationing and investor heterogeneity in fund expected returns. Development organizations, foundations, financial institutions, public pensions,...

January 3, 2020
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02Jan

US. Estate Planning: What Does the SECURE Act Mean for You and Your Retirement?

The SECURE Act signed into law in December is the most important retirement legislation in over a decade. The overall goal of the SECURE Act was to make saving for retirement easier and more affordable. Read also Japan’s GPIF is right — short selling is downright irresponsible What’s New? One major change is that the age that individuals must start taking their minimum distributions from retirement accounts has been raised from 70 ½ to 72. This is important because it...

January 2, 2020
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December 2019

26Dec

US. Why states must address pension reform now, before it’s too late

By Keith Greinet and Seth Grove  It’s been quite a while since the American economy has performed as well as it is now doing. Joblessness has sunk to record lows, causing some analysts to suggest we may be as close to full employment as we’re ever going to get. Core inflation remains under control, wages are rising and the U.S. Treasury just announced record total tax revenues of $470 billion for the first two months of the new...

December 26, 2019
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20Dec

State Pension Funds Reduce Assumed Rates of Return

State and local public employee retirement systems in the United States manage over $4.3 trillion in public pension fund investments, with returns on these assets accounting for more than 60 cents of every dollar available to pay promised benefits. About three-quarters of these assets are held in what are often called risky assets—stocks and alternative investments, including private equities, hedge funds, real estate, and commodities.1 These investments offer potentially higher long-term returns, but their values fluctuate with ups and...

December 20, 2019
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20Dec

Debt Close to Retirement and Its Implications for Retirement Well-being

By Annamaria Lusardi, Olivia S. Mitchell, Noemi Oggero We analyze debt and debt management of Americans nearing retirement age. We show that older people have numerous financial obligations that can lead to financial distress. Using data from the 2015 National Financial Capability Study and an extensive literature review, we show that lack of financial literacy, lack of information, and behavioral biases help explain the prevalence of debt later in life. Our evidence indicates that debt at older ages can...

December 20, 2019
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19Dec

US. Retirees elected to Legislature in November can draw pension, thanks to IRS phone call

Most people do not welcome a phone call from the Internal Revenue Service, but a recent call means that Mississippi’s retired public employees can serve in the Legislature and draw their pension. The Public Employees Retirement System Board, based on the IRS phone call, voted unanimously Tuesday to change its long-standing regulation that prevented retired public employees from drawing their pension while serving in the Legislature. Early last year the PERS Board had voted to change the regulation by...

December 19, 2019
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16Dec

Ethics, ESG, and ERISA: Ethical-Factor Investing of Savings and Retirement Benefit

By Albert Feuer (Law Offices of Albert Feuer) Ethical-factor investing is investment decision-making that takes into account ethical factors. It includes faith-based investing, Environmental, Social or Governance (ESG) investing, and sustainable investing. It is becoming more and more widespread. This has occurred despite a lack of widely accepted definitions, performance metrics, or ethical preferences. There is increasing broad agreement that some ethical factors highlight business risks and opportunities in a predictable fashion, such as the effects of climate change, human...

December 16, 2019
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12Dec

US. New e-delivery rules for ERISA pension plans on the Horizon

By McBrayer McGinnis Leslie & Kirkland PLLC In October, the U.S. Department of Labor (DOL) published a proposed rule that encourages electronic delivery of ERISA-required plan disclosures. It allows plan administrators to post disclosures online to cut costs of paper delivery and is a voluntary safe harbor that plans can use to make documents accessible on a website instead of mailing paper documents. Adopting a so-called “notice and access” e-delivery structure, the DOL allows plans to save paper by emailing disclosures....

December 12, 2019
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09Dec

US. Workers Across All Income Levels Are Making This Major Retirement Plan Mistake

By Maurie Backman Without independent savings, retirees risk struggling financially during their golden years. That's why workers are advised to sock away funds in an IRA or 401(k) -- to ensure that they have enough money to cover their living expenses when they're older. But data from J.P. Morgan Asset Management reveals that workers across all income levels are borrowing money from their retirement plans. And that's a troubling trend. The problem with borrowing from your retirement plan Though middle-income...

December 9, 2019
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04Dec

US. Connecticut to stop investing pension money in gun manufacturers

Connecticut's treasurer, who oversees $37 billion in public pension funds, announced plans Tuesday to divest $30 million worth of shares in civilian firearm manufacturers while banning similar future investments and creating incentives for banks and financial institutions to enact gun-related policies when lending to companies. If approved by an advisory board, it will mark the first time Connecticut has taken the step of divesting shares in firearm-related companies since the 2012 Sandy Hook Elementary School shooting in Newtown that...

December 4, 2019
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