July 2023
19Jul

US. ERISA Advisory Council Highlights Trends in Pension Risk Transfers

Shaun O’Brien, the chair of the ERISA Advisory Council, summarized many of the trends in the pension risk transfer market and commonly expressed concerns from pension fiduciaries and stakeholders at a hearing the council hosted Tuesday at the Department of Labor. The hearing was held to discuss possible changes to Interpretative Bulletin 95-1, which requires that pension fiduciaries select the safest annuity providers when executing pension risk transfers. Considering modifications to IB 95-1 was required by Section 321 of the...

July 19, 2023
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18Jul

US. New York City pension chief urges pay clawbacks at Bank of America

New York City's top pension official has urged Bank of America's (BAC.N) board to claw back pay from executives after the bank agreed to pay $250 million to settle regulatory claims that it double-charged customers and took other steps without authorization. Since the financial crisis of 2008, provisions to recover pay have been strengthened at top U.S. banks to limit risk-taking. Bank of America did not admit wrongdoing in its July 11 agreements with the Consumer Financial Protection Bureau (CFPB)...

July 18, 2023
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17Jul

Inflation doesn’t always produce a bigger pension

Following the Great Recession and extending into the low-interest-rate environment of the 2010s, state legislatures reduced, suspended or eliminated cost-of-living adjustments among public plans in the name of protecting pension systems' health. Their record is decidedly more mixed during the recent run-up in inflation and interest rates, rejecting COLAs for underfunded pension plans and offering one-time supplemental payments to retirees as a compromise between COLAs and nothing. "My general observation is that it seems to be politically easier to reduce COLAs...

July 17, 2023
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14Jul

US. Worst American City for Pensions Confronts a $35 Billion Crisis

One of Brandon Johnson’s first moves as Chicago mayor was to buy himself time to address the city’s biggest financial problem: the more than $35 billion owed to its pension funds. Just days after his May inauguration, Johnson persuaded state lawmakers to shelve legislation that would’ve added billions to the pension debt, while pledging to establish a working group to come up with solutions by October. Now, the clock is ticking for the progressive Democrat to fix the worst pension crisis...

July 14, 2023
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12Jul

Investment returns push U.S. corporate pension funding to 102.2% in June

U.S. corporate pension funds enjoyed greater surpluses in their funding ratios in June thanks to strong investment returns during the month, according to the latest Milliman Pension Funding index. As of June 30, the estimated funding ratio of the 100 largest U.S. corporate pension funds was 102.2%, up from 100.7% at the end of May and also marks a six-month increase from 101.9% at the end of 2022, according to the index. "While June saw strong monthly investment returns and muted...

July 12, 2023
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11Jul

US. To Fix the Care Economy, the United States Should Look Internationally

The care economy and the role of caregiving in unpaid and paid work have been in the spotlight recently in the United States. In 2021, the proposed Build Back Better plan would have invested $400 billion in the care economy—including long-term care services under Medicaid, paid family and medical leave, and better pay for home and child care workers—but failed to pass after some legislators equated it with socialism. A recent executive order that integrates more supportive caregiving policies...

July 11, 2023
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07Jul

U.S. corporate pension funding increases cushion in June – 3 reports

U.S. corporate pension plan funding ratios jumped further above 100% in June, driven by strong equity markets, according to three new reports. Wilshire Advisors estimated the aggregate funding ratio of U.S. corporate plans vaulted 2.3 percentage points to 103.5% as of June 30. The increase was driven primarily by increases in asset values, while liability values remained relatively unchanged. "June's funded status saw the largest monthly increase since October 2022 due to asset value increases with the performance of the FT Wilshire...

July 7, 2023
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06Jul

US. Chicago’s pension crisis worsens with investment losses

It’s a good thing Mayor Brandon Johnson established his own “working group” to find long-term solutions to Chicago’s pension crisis. The mountain is getting steeper to climb. Chicago’s unfunded pension liability rose by 5.4% in 2022 — from $33.6 billion to $35.4 billion — after stock market losses suffered by the four city employee pension funds. The Firefighters Pension Fund hovers closest to bankruptcy, with assets to cover just 18.8% of liabilities. That’s followed by Municipal Employees (20.7%), Police (21.5%) and...

July 6, 2023
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04Jul

California Quietly Shelves $15 Billion Pension Divestment Bill

The California State Assembly has shelved legislation that would have forced the country’s two largest pension funds to divest an estimated $15 billion from oil and gas companies, a major blow to environmental advocates who hoped the funds could be a national model for the divestment movement. SB-252, which passed the state Senate in May, won’t be given a floor vote, according to the bill’s lead author, Senator Lena Gonzalez of Los Angeles County. The legislation has been converted to...

July 4, 2023
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03Jul

U.S. pension funds, universities face pressure over China investments

U.S. public pension plans and universities are facing pressure to divest their portfolios from China amid tensions between Washington and Beijing, with billions of dollars at stake. Proposed federal and state legislation takes aim at public money being used toward investment into China over fears about national security and whether American dollars should go to a country the U.S. has deemed its primary strategic competitor. In May, a group of U.S. Senators led by Republican Marco Rubio reintroduced legislation which would ban the...

July 3, 2023
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