By Professor United States Congress Role of public employee pensions in contributing to state insolvency and the possibility of a state bankruptcy chapter hearing before the Subcommittee on Courts, Commercial and Administrative Law of the Committee on the Judiciary, House of Representatives, One Hundred Twelfth Congress, first session, February 14, 2011. (more…)
KKR & Co. L.P. KKR , The Blackstone Group L.P. BX and PAAMCO along with their founders have been accused of violating their fiduciary duty to the Kentucky Retirement Systems pension fund by giving the fund wrong investment advice. Recently, a few Kentucky state workers filed a lawsuit against the three investment groups in Franklin Circuit Court. The lawsuit seeks monetary damages from these firms for losses incurred by KRS in investments recommended by them. The defendants also include some former or current KRS board members, and,...
By Justin Fox The headline from the Dutch business newspaper Het Financieele Dagblad caught my eye on Twitter a few weeks ago: “America is the example of how not to do pensions.” The quote was from an interview with Angelien Kemna, who stepped down on Nov. 1 from the top finance job at APG Groep NV, which manages the Netherlands’ biggest (and world’s fifth-biggest) pension fund. After reading it, it struck me that it might be useful to let U.S. readers know what one of...
TIAA Institute analyzed the use of advice in 23 plans for which it was the sole recordkeeper between 2009 and 2014 and found that a mere 13% of participants seek out advice. However, interest in advice increases with age, account balance and annual contribution level, according to TIAA’s report, “New Evidence on the Demand for Advice Within Retirement Plans.” For example, among those in the lowest five deciles with regards to their account balance, only 8% seek out advice. In deciles...
By Ruiqi Tian (Southwest Jiao Tong University - Psychological Research and Counseling Center) & Ruilin Tian (North Dakota State University - Department of Accounting, Finance, and Information Systems) Pension becomes more and more important as people are living longer and pursuing higher living quality after retirement. This paper is to analyze the psychosocial factors that affect people’s pension demands in the US as well as in China. As two representative countries that have different pension systems, cultures, value systems, family...
The largest pension plans held by S&P 500 companies face a $348 billion funding gap. As a result, they’re paying higher annual fees to the U.S. Pension Benefit Guaranty Corp., the government agency that backstops plans. “There’s increased awareness that an underfunded plan imposes risk on employees, it imposes risk on shareholders, and it’s getting more expensive,” says Olivia Mitchell, a professor at the University of Pennsylvania’s Wharton School and executive director of the Pension Research Council. The fees, called variable-rate...
By David Blackmon In a recent piece, I wrote about the fact that the Divestment movement is now running into headwinds, as federal public policy under the Trump Administration moves further away from the movement’s goal of artificially limiting the production of oil and gas domestically, and as it is becoming increasingly clear that some major public pension funds are finding themselves severely underfunded after years of heavy focus on the movement’s investing priorities. As it has become increasingly obvious over...
Last month, Norway’s $1 trillion pension fund announced plans to drop oil and gas stocks from its core benchmark stock portfolio. The move was of note because it served as an important acknowledgement by a major institutional investor that such holdings have lost their status as mainstream, blue-chip investments and are now considered speculative. It carries special significance too because the Norwegians really know the oil and gas market. The country owns vast oil reserves and the government — and...
The full Senate is expected vote on its version of the tax reform bill as early as this week, and so far, it leaves 401(k) plans and IRAs untouched. That can always change, however, says Erik Carter, senior financial planner at financial wellness company Financial Finesse, so it is important for employers to keep an ear to the ground as the bill makes its way through debate on the floor. Currently, “retirement provisions in the bill are not intended to raise...
Whe new year won’t bring significant changes to 401k plans, experts say, which means it’s the perfect time for employers to boost their financial education efforts. Employees who are stressed about finances have lower productivity. And, when workers don't retire because they can't afford to, employers are faced with a talent logjam that creates high healthcare costs and a brain drain when those workers leave. These phenomenons have, in recent years, led employers to take various actions, from offering flexible...
