November 2019

28Nov

CPPIB takes stake in Latin American fitness chain Smart Fit

Canada Pension Plan Investment Board has acquired a 12.4 percent stake in Latin American fitness chain Smart Fit. The investment was for C$340 million. Smart Fit, which currently serves 2.5 million members across 739 locations in ten countries, is headquartered in São Paulo, Brazil São Paulo, Brazil/Toronto, Canada (November 26, 2019): Canada Pension Plan Investment Board (“CPPIB”) has invested R$1,071 million (C$340 million) for a 12.4% stake in Smartfit Escola de Ginástica e Dança S.A. (“Smart Fit”), broadening its...

November 28, 2019
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22Nov

Impact investing is about more than saving the world

“It’s not up to us to save the world.” This was the response I received from a trustee of one of the UK’s largest pension schemes recently to my pitch for impact investment. The reaction was familiar. The paucity of data showing that you can “do well by doing good” makes it easy for schemes to ignore commentators who insist upon it. Yet for all the myths that have grown up discouraging this type of investing, institutional investors who...

November 22, 2019
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October 2019

09Oct

UK. Two in five employers concerned by ageing workforce

After surveying employers with over 500,000 staff between them, the researchers found that 44% are worried about older employees that cannot afford to stop working. This has become particularly concerning after the default retirement age was scrapped in 2011, making it increasingly necessary for companies to provide pension support. However, most defined contribution (DC) pension schemes do not have adequate levels of contributions needed to maintain a similar standard of living for many employees. “The impact of an ageing...

October 9, 2019
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08Oct

4 reasons the corporate pension is on its deathbed

General Electric's move to significantly lower its pension liabilities is simply the latest in a sweeping corporate pivot away from guaranteed retirement benefits. GE on Monday announced that it would offer lump-sum pension buyouts to about 100,000 former U.S. employees who have not yet begun receiving their pensions.  The company, which has been facing pressure to bolster its finances, also announced plans to freeze pension benefits for about 20,700 salaried pensioners at current levels. Taken together, the moves illustrate how corporate America has largely ditched pensions,...

October 8, 2019
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07Oct

Norway’s largest pension fund KLP exits oil sands companies

KLP, Norway’s largest pension fund, will no longer invest in companies deriving their income from oil sands, and recently sold stocks and bonds in such firms worth about $58 million, it said on Monday. Oil sands have been a focal point of environmental groups’ global efforts to stifle energy production from fossil fuels, saying they take an especially large toll on the environment. KLP’s decision affects five companies, which were added to its exclusion list: Canada’s Cenovus Energy, Suncor...

October 7, 2019
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07Oct

South Africa. Prescribed assets would upset the rationale for pension funds

One of the main criticisms of prescribed assets is that forcing pension funds into these investments would hurt individual savers. Besides the market distortions that prescribed assets would create, everyone understands that they would deliver below market returns. Under South Africa’s previous dalliance with prescribed assets, this impact was primarily felt by employers. This is because pension funds back then were run in a different way – they were all based on defined benefits. This meant each member did...

October 7, 2019
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September 2019

19Sep

Brazil’s Petros Pension Aims to Increase Private Equity Investment in 2020

One of the largest state-run pension funds in Brazil could gradually resume investing in private equity next year, following a period of cutting back its exposure to the asset class and changes in the rules governing the investment vehicles themselves. “It’s a move that will happen in slow motion,” Alexandre Mathias, chief investment officer of the employee pension fund at state-run oil giant Petróleo Brasileiro SA, or Petrobras, said of the plan to resume making fresh investments in the...

September 19, 2019
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09Sep

Canada Pension Plan Investment Board Invests in India-Based Logistics Provider Delhivery Pvt Ltd

Canada Pension Plan Investment Board (CPPIB) has invested US$115 million in Delhivery Pvt Ltd, broadening its exposure to the logistics sector in India. Delhivery, one of India's leading third-party logistics providers, operates in more than 2,000 cities (more than 17,500 pincodes) offering a full range of supply chain services. "The continued strong growth of e-commerce has generated significant opportunities in India's express logistics space for long-term investors such as CPPIB, and we are pleased to partner with a...

September 9, 2019
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August 2019

30Aug

Using Vignettes to Improve Understanding of Social Security and Annuities

By Anya Samek, Arie Kapteyn, Andre Gray Evidence shows that people have difficulty understanding complex aspects of retirement planning, which leads them to under-utilize annuities and claim Social Security benefits earlier than is optimal. To target this problem, we developed vignettes about the consequences of different annuitization and claiming decisions. We evaluated our vignettes using an experiment with a representative online panel of nearly 2,000 Americans. In our experiment, respondents were either assigned to a control group with no...

August 30, 2019
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June 2019

21Jun

Annuity Pricing in Public Pension Plans: Importance of Interest Rates

By Nino Abashidze, Robert L. Clark, Beth Ritter, David Vanderweide There is little systematic information on the distribution options in public sector retirement plans and how annuity options are priced relative to the standard single life annuity. This study examines the distribution options of 85 large public retirement plans covering general state employees, teachers, and local government employees. An important component of the analysis is the construction of a data set presenting the annuity options offered by each of...

June 21, 2019
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