March 2019

22Mar

401(k) managed accounts becoming more diverse

Some record keepers of defined-contribution retirement plans are diversifying the managed-account products they offer to employers and their employees in a bid to boost uptake and diversify their revenue streams in an environment of fee compression, according to experts. Empower Retirement is the most recent example. The record keeper — among the largest, with $590 billion in assets and more than 9 million participants — debuted its Advisor Managed Accounts product Mar. 20. Unlike a traditional managed account —...

March 22, 2019
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21Mar

The Retirement Crisis Is Much Worse Than You Think

Are you sitting down for this? According to a recent survey, one in five American adults have nothing saved for retirement or emergencies. A further 20 percent have squirreled away only 5 percent or less of their annual income to meet certain financial goals. Less than a third of all Americans have saved at least 11 percent or more. The survey, conducted by Bankrate in late February and early March, is just the latest indication that the U.S. faces...

March 21, 2019
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20Mar

US. It just became easier for employers to dump retirees’ pensions

Traditional pensions are disappearing in America, and the federal government just made it easier for employers to get rid of them. With no fanfare in early March, the Treasury Department issued a notice that allows employers to buy out current retirees from their pensions with a one-time lump sum payment. The decision reverses Obama-era guidance, issued in 2015, that had effectively banned the practice after officials determined that lump-sum payments often shortchanged seniors. Now, advocates for the elderly worry...

March 20, 2019
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19Mar

Only half of Americans have access to a 401(k)

Using a 401(k) plan to save for retirement is an attractive option: You get tax advantages, the funds are automatically taken out of your paycheck for you and sometimes your company even matches your contribution up to a certain amount, which is essentially free money. But many Americans don’t have access to this specific retirement tool. “Roughly half of all households are offered work-based retirement plans at their current jobs,” researchers at the Stanford Center on Longevity point out...

March 19, 2019
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19Mar

Pension Risk Transfer Volume Blows Past Forecasts

U.S. life insurers took over more pension responsibility than they might have expected in 2018. Full-year sales of group annuities used to transfer pension risk increased to about $26 billion in 2018, up 15% from the total for 2017, according to new issuer survey data from the LIMRA Secure Retirement Institute. In June, Wayne Daniel, head of U.S. pensions at MetLife, predicted pension plan sponsors might use group annuities to transfer about $20 billion in pension risk in 2018....

March 19, 2019
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18Mar

Public Pensions And Social Trust

So it seems that I hit the one-year mark of my writing on retirement at this platform, and have still not managed to address some of the topics I wanted to discuss, in particular, questions of what pensions look like abroad and what we can learn from them.  But right now I find myself thinking about international comparisons in another way, around the question of social trust. Round about a year ago, Megan McArdle, formerly a Bloomberg columnist and now writing at...

March 18, 2019
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17Mar

Defined Contribution Pension Plans: Who Has Seen the Risk?

By Peter Forsyth (University of Waterloo - David R. Cheriton School of Computer Science) & Kenneth R. Vetzal (University of Waterloo) The trend towards eliminating defined benefit (DB) pension plans in favor of defined contribution (DC) plans implies that increasing numbers of pension plan participants will bear the risk that final realized portfolio values may be insufficient to fund desired retirement cash flows. We compare the outcomes of various asset allocation strategies for a typical DC plan investor. The strategies...

March 17, 2019
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15Mar

Why Americans must rise to the challenge of an aging population

At dawn on his 62nd birthday in 1366, Petrarch started a letter to his friend Boccaccio. “When you feel that you are old,” the Italian humanist told his fellow writer, “then and no sooner will you declare your old age.” Why should we care about old age any more now than Petrarch did then? Demographics. Every day until 2030, about 10,000 Americans will turn 65. Between now and 2050, the number of Americans over 65 will double. By then,...

March 15, 2019
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14Mar

South Korean pension fund deals blow to Elliott in Hyundai fight

Elliott Management received a potentially fatal blow in its proxy fight to shake up South Korea’s Hyundai Motor Group on Thursday when major shareholder the National Pension Service (NPS) said it would vote down the U.S. hedge fund’s proposals. Elliott, founded by billionaire Paul Singer, has been battling to get South Korea’s No.2 conglomerate to return excess capital to shareholders and fix governance problems since May last year when it scuppered a restructuring plan. [L4N1RG5BG] The fund has demanded...

March 14, 2019
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12Mar

US. ‘Dire situation’: Pension costs may close dozens of Kentucky health departments

About $38 million in increased pension costs could shutter health departments serving 42 Kentucky counties next fiscal year. State health leaders are pressing lawmakers for a one-year reprieve to allow time to overhaul a public health system now facing a financial crisis. The higher pension tab could lead local health departments serving an additional 22 counties to run out of reserves and be forced to close the following year, state officials said. That would hit a system...

March 12, 2019
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