July 2023
21Jul

US. Many Gen-Xers have zero retirement funds. What can we do to address America’s retirement crisis?

Gen-Xers, those born between 1965 and 1980, are falling behind when it comes to saving for retirement. The typical household holds only $40,000 in retirement savings, according to a new report from the National Institute on Retirement Security. The issue is exacerbated when you break down savings by income level and race. The bottom half of earners only have a few thousand in savings, while 40% of Gen-Xers have retirement savings accounts with zero balances. The report explained that Gen-Xers have...

July 21, 2023
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20Jul

US. The debate over ESG and retirement plans continues

Part of the ongoing congressional debate over ESG centers on whether these factors should be considered as part of pension and retirement funds. Those of you expecting a resolution should prepare to exercise some patience. One of the most active representatives on the anti-ESG side of the debate is Rep. Andy Barr (R-Ky.), who introduced legislation targeting the use of ESG factors in retirement plan investments June 21. Barr has proposed changes to the Employee Retirement Income Security Act, which...

July 20, 2023
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20Jul

US Public Pensions Invest Record $1.6 Trillion in Alternative Assets

US public pensions have boosted their exposure to private equity to $622 billion, the highest in at least two decades, as part of a push for higher investment returns, according to a new report by the Equable Institute. Private equity makes up 13% of the state and local retirement plans’ investments as of 2022, compared to 11% the prior year, according to the nonprofit research group, which cited the latest data available. Overall, alternative assets — like private equity, hedge...

July 20, 2023
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19Jul

U.S. public pension funds unlikely to hit investment targets this year – report

State and municipal pension funds will likely miss their investment targets this year and will probably not see meaningful improvements in their unfunded liabilities or funding ratios, according to Equable Institute's "State of Pensions 2023" report released on Tuesday. Unfunded liabilities climbed to $1.57 trillion in 2022, bringing the national aggregate funding ratio to 75.4% due to negative investment returns, Equable said in a release issued in conjunction with the report. Equable now projects that the aggregate funding ratio for U.S....

July 19, 2023
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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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