November 2017

22Nov

US. Pension Funds Would Be Well-Advised to Reduce Risk

Municipal pension plans are in a tough spot. They have trillions of dollars in unfunded liabilities, interest rates are low, and we’re coming up on the ninth consecutive year of stock market gains in the U.S. Municipalities are going to have a hard time balancing their need to take risk against their reluctance to do so in this environment. The largest U.S. pension fund is considering making a change by reducing equity risk in its portfolio. The California Public Employees’...

November 22, 2017
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16Nov

One unexpected problem with retirement savings: knowing how to spend it

Not only do Americans need to save more for their retirement but they need to learn how to spend that money wisely when they get there. Spending down retirement assets is one of the many challenges Americans face when it comes to retirement planning, according to the Government Accountability Office’s recent report on the state of American’s retirement savings — along with actively putting away money, which influences how much they can put towards other financial goals and lifestyle choices,...

November 16, 2017
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15Nov

Largest U.S. pension fund may slash exposure to stocks

The California Public Employees' Retirement System, the largest U.S. pension fund, is considering more than doubling its bond allocation to reduce risk and volatility as the stock bull market approaches nine years. Calpers is looking at a menu of options for its fixed-income target ranging from the current 19 percent to as much as 44 percent, according to a presentation for a board workshop in Sacramento coming up Monday. Equities could be cut to as little as 34 percent from...

November 15, 2017
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13Nov

UK and US ‘must learn from poor countries’ to solve ageing crisis

The ageing crisis facing Britain, the US and other wealthier nations could be partly addressed by adopting initiatives being developed in poorer countries, experts say. Low- and middle-income countries have been forced to be “innovative and ingenious” in finding low-cost and effective solutions for their growing elderly populations. Some of the initiatives include: Devoting an entire city in Chile to experimenting with elderly care. Increasing involvement of older people in democracy through old people’s councils in Brazil. Training armies of volunteers in elderly...

November 13, 2017
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13Nov

US. The Constitution can’t protect underfunded public pensions

Government-employee unions won in a landslide last week, defeating New York’s ballot question to update the state constitution by 78 percent to 16 percent. Public-sector groups were worried that any changes would imperil their pensions, which the constitution guarantees. But public-sector workers should worry less about words and more about numbers. Whenever anyone writes that public-sector pensions are unsustainable, New York union leaders have a rejoinder: The constitution guarantees them. Such benefits, according to the document, “shall be a contractual...

November 13, 2017
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09Nov

US. N.Y. Pension Fund Manager Charged With Taking Bribes Pleads Guilty

A former portfolio manager at New York state’s retirement fund pleaded guilty to two counts of conspiracy on Wednesday after U.S. prosecutors accused him of steering more than $3 billion in trades to two brokerages in exchange for bribes that included vacations, cocaine and prostitutes. Navnoor Kang, 37, former director of fixed income and head of portfolio strategy at the New York State Common Retirement Fund, entered his plea before U.S. District Judge Paul Oetken in Manhattan federal court, according...

November 9, 2017
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09Nov

Prudential, PIC Reach $1.2 Billion Longevity Reinsurance Agreement

Prudential Retirement, a unit of Prudential Financial, Inc. (NYSE:PRU), and Pension Insurance Corporation (PIC), have entered into their fifth longevity reinsurance transaction since 2015. In the agreement, The Prudential Insurance Company of America assumes the longevity risk for $1.2 billion (about £900 million) in pension liabilities, covering approximately 4,000 pensioners across four pension schemes. The transaction highlights the rebounding demand for pension de-risking solutions in the U.K., and the desire of many U.K. pension insurers to manage their risks and...

November 9, 2017
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08Nov

US. Educators present ‘Shared Responsibility’ pension plan in Frankfort

Barren County Schools Superintendent Bo Matthews traveled to Frankfort on Monday with other educational leaders for a joint press conference at Woodford County High School to present an alternative pension plan – called the Shared Responsibility Plan – to the one presented by the office of Gov. Matt Bevin, according to an email from Matthews to media outlets. According to a press release from the Kentucky Association of School Superintendents (KASS), the Shared Responsibility Plan is “designed to address challenges...

November 8, 2017
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07Nov

US. How Tax Bill Affects Retirement Plans

The House tax bill doesn’t slash 401(k) pre-tax contributions, but that doesn’t mean it doesn’t affect retirement savings, writes InvestmentNews. Example: under the House bill, employees would have more time to repay 401(k) loans if they leave the company or the plan is ended. The current window is 60 days; after that, the loan becomes a taxable distribution as well as a potential early-withdrawal penalty. The bill gives participants up to their tax-return due date to replace the borrowed amount. Hardship...

November 7, 2017
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03Nov

The Nation’s Retirement System: A Comprehensive Re-Evaluation Is Needed to Better Promote Future Retirement Security

By Charles A. Jeszeck, Margie K Shields, Justine Augeri, Christina Cantor, Gustavo Fernandez, Jennifer Gregory, Adam Wendel, Seyda Wentworth (Government Accountability Office) The U.S. retirement system, and the workers and retirees it was designed to help, face major challenges. Traditional pensions have become much less common, and individuals are increasingly responsible for planning and managing their own retirement savings accounts, such as 401(k) plans. Yet research shows that many households are ill-equipped for this task and have little or no...

November 3, 2017
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