February 2025
06Feb

US. Illinois’ economic future pressured by worst pension crisis in nation

The urgency and severity of Illinois’ pension crisis is undeniable when compared to the rest of the nation. Reports from the Equable Institute found Illinois lags in both pension funding and performance compared to other states at the end of fiscal year 2024. If the state fails to fix its pension issues, the budget will continue to be strained, people will continue leaving the state and future pension benefits could be at risk. Preserving the cost savings of Tier 2, offering retirement choice...

February 6, 2025
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January 2025
31Jan

NIRS’ Pensionomics 2025 Report

By Andrew Clark Earlier this month, the National Institute on Retirement Security (NIRS) released its bi-annual Pensionomics report, which details how spending from defined-benefit pensions boosts economies in communities nationwide and continues to be a reliable economic driver for millions of people. The report examines the impact of pensions on local economies nationwide by calculating the benefits paid to retirees and the subsequent spending generated by these benefits. This analysis includes tax revenue and local expenditures, which stimulate the broader economy, leading...

January 31, 2025
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31Jan

Financial Inclusion Across the United States

By Motohiro Yogo, Andrew Whitten & Natalie Cox We study retirement and bank account participation for the universe of U.S. households with a member aged 50 to 59 in the administrative tax data. ZCTA-level average income, income inequality, and racial composition predict retirement account participation for low-income households, conditional on household income and regional price parities. Income inequality also predicts bank account participation for low-income households. We estimate the causal effect of access to an employer retirement plan on participation. Recent policy proposals...

January 31, 2025
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31Jan

US. DOL Issues New Guidance Streamlining the Voluntary Fiduciary Correction Program

Seyfarth Synopsis: The Department of Labor (DOL) has issued a much awaited amendment to its Voluntary Fiduciary Correction Program (VFC Program). Notably, the amendment adds a self-correction feature for the delinquent transmittal of participant contributions and loan repayments under certain circumstances. This self-correction program allows plan fiduciaries, including plan sponsors, to correct these types of transactions without the additional hassle and expense of formally submitting an application with the DOL’s Employee Benefits Security Administration (EBSA) for approval and relief. Background The...

January 31, 2025
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30Jan

US. More than 4 in 5 retirement plans have at least one regulatory ‘red flag’ violation

More than 4 in 5 workplace retirement plans in the U.S. (84%) have at least one regulatory “red flag” violation that could put them at risk of fines, legal penalties or fiduciary failure, according to consultant Abernathy Daley 401k Consultants. Of the nearly 765,000 defined contribution plans analyzed, 43% had at least one “regulatory infraction red flag” or RIRF, the most severe type of violation that could result in civil legal penalties, discovery leading to trial, or both, Abernathy said. RIRF...

January 30, 2025
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27Jan

UK. Reeves set to announce plans for DB pension surplus rule changes

Chancellor, Rachel Reeves, is expected to reveal a range of initiatives to promote economic growth later this week, including plans to make it easier for sponsors of defined benefit (DB) pension schemes to access surplus funds, Sky News has reported. According to the reports, Reeves is set to announce that she wants to change DB surplus rules to boost investment in the UK economy, with government sources suggesting that this could unlock more than £60bn of pension surpluses held in DB schemes. At...

January 27, 2025
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24Jan

US Pension Plan Managers Split on Primary Benefit of Private Assets

As an increasing share of pension funds increase their allocations to private markets, plan managers are split on the benefit these assets have in their portfolio. Most pension fund executives also expect distributions from private equity, which have been lower in recent years, will increase over the next three years. According to a survey from Ortec Finance B.V., which interviewed pension fund executives in the U.S. about their expectations for the next three years, approximately 74% said they expect higher...

January 24, 2025
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20Jan

An Older America Will Be Less Prosperous, But We Don’t Have To Get Old

America is getting older. Between 1980 and 2022, the median age increased from 30 to 39. An older population will impact the country in a variety of ways, some more obvious than others. One likely yet underappreciated impact will be less entrepreneurship. A new study by Rui Zhang and Mengyao Kang published in the Journal of Regional Science finds that countries with higher shares of elderly people have fewer entrepreneurs and new businesses. The increase in America’s median age coincides...

January 20, 2025
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17Jan

U.S. DB pension payouts generating US$1.5 trillion in economic output: report

In 2022, U.S. retiree spending — driven by private and public sector defined benefit pension payouts — generated US$1.5 trillion in total economic output and supported 7.1 million jobs, according to a new report by the National Institute on Retirement Security. It found in addition to the impact on employment and economic activity, DB pension payouts added $224.3 billion in tax revenue at the federal, state and local levels. The report noted $680.6 billion in pension benefits were paid to 26.3...

January 17, 2025
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15Jan

Torsten Bell named new UK pensions minister

Torsten Bell has been appointed as the new pensions minister for the UK government in yet another quickfire change to the line-up of people responsible for this important and complex area. Bell’s appointment follows the resignation of Tulip Siddiq as Economic Secretary to the Treasury yesterday (14 January) over an anti-corruption investigation in Bangladesh. Consequently, the previous pensions minister, Emma Reynolds, was appointed as the new Treasury minister, leaving the pensions role vacant for Bell. Kate Smith, head of Pensions at Aegon...

January 15, 2025
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