May 2017

03May

How pension funds can help relieve Kenya’s debt burden

Kenya’s heavy debt burden could be managed without hurting ongoing execution of the mega infrastructure projects if the government taps into the multi-billion shilling pension funds. That was the verdict of the pension industry leaders meeting in Nairobi last week, under the auspices of an African Development Bank-backed think-tank, Making Finance Work for Africa (MFW4A). African governments, they said, must rethink their sources of development funds and opt for those that best serve the interests of their countries in the long...

May 3, 2017
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03May

UK. Retirement: are pensions going to be much smaller in future?

Increasing life expectancy has seen the number of years in which people spend in retirement creep ever upwards. Using census data, the Office for National Statistics calculated that in 1981 a 65 year old man could expect to live another 13 years (17 for a woman). By 2011 this had increased by five years to 18 years of retirement (21 for a woman). By 2050, more than 50,000 Britons are expected to reach 100, and it is now predicted that...

May 3, 2017
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03May

US. The Obama-era workplace retirement plans that the GOP wants to kill

I’m at a loss as to why some Republicans on Capitol Hill want to block the creation of workplace retirement plans for small-business employees. We know that Social Security will soon face some serious funding issues. And with fewer companies offering pensions these days, we know that workers have to save for their own retirement. The percentage of employers still offering a traditional defined benefit plan to new hires has fallen significantly, according to advisory services firm Willis Towers Watson. In...

May 3, 2017
News, OP Ed
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02May

350,000 Workers Benefit After Billions Pulled From Asset Managers

Britain’s $32 billion railway pension scheme has halved the cost of running its biggest asset pool by moving investments in-house. RPMI RailPen, which oversees the retirement assets of 350,000 British railway workers, pulled billions of pounds from hedge funds and other money managers, reducing the cost of overseeing its main fund to half a percentage point. And there’s more cost-cutting to come, says the firm’s investment chief. “Fifty basis points is not bad for something that has property in it, but...

May 2, 2017
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02May

African pension funds see low returns in limited cross-border investment

Pension schemes are finding it difficult to make cross-border investments due to political interference, a Pan-African forum was told in Nairobi last week. Subsequently pension funds hold billions of shillings in unattractive government-linked ventures, thereby denying members higher returns as well as the opportunity to profitably contribute to development. The forum heard that most pension fund trustees are subject to political sway thus making it difficult to innovate new products or investments. Cross-border investments are often considered unpatriotic. The Making Finance Work...

May 2, 2017
News, OP Ed
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02May

Pension Reform in Asia is Extremely Difficult to Get Right

Pension reform has taken centre stage in Singapore and Hong Kong over the past two years, and more recently, in Taiwan. Just two weeks ago, chaotic scenes outside Taiwan's parliament, the Legislative Yuan, forced a planned review of to be postponed to next month. But pension reform in these three Asian Tigers have been done for different reasons; in Singapore and Hong Kong, reforms have been motivated by a lack of pension adequacy, in Taiwan, pension adequacy is not...

May 2, 2017
News, OP Ed
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02May

Credit Suisse releases study on the challenges faced by Swiss pension funds

Credit Suisse on May 2 published a study entitled "Swiss pension funds survey – Low interest rates and demographics as the main challenges". Starting point of the study, written by Credit Suisse's economists and strategic investment consultants for institutional clients, are the results of a survey among almost 200 pension funds. Based on the survey results, the authors estimate that in 2015, some CHF 5.3 billion of second-pillar funds were redistributed from active insured persons to pension recipients. In this...

May 2, 2017
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01May

Triple-lock: Call for pensions policy to be revamped

Steve Webb, pension minister from 2010 to 2015 and now a director at mutual insurer Royal London, has proposed a "middle way" on state pension policy. The triple-lock sees the state pension rise in line with wages, inflation or by 2.5% - whichever is highest. However, it is becoming increasingly expensive to maintain and some have called for it to be scrapped. A recent review by former CBI director-general John Cridland, who was appointed as the government's independent reviewer of state pension...

May 1, 2017
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01May

Royal Mail tweaked pension proposal prompts violent response from CWU

Royal Maill have confirmed that theie current Defined Benefit pension scheme, will close to future accrual on the 31st of March 2018, subject to Trustee approval. This has, as expected, caused a bit of a reaction from the Unions. As part of their 2018 Pension Review, Royal Mail have been working with the CWU and Unite/CMA on a sustainable and affordable solution for some time. A couple of weeks ago the CWU said that a “defined benefit Wage in Retirement...

May 1, 2017
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01May

Sustainable finance, financial regulators, and the changing landscape in Nigeria

Today, Kodak is gone because it did not pay close attention to the threat posed by the smartphone technology to its business. It did not adapt to the changing nature of its business environment. The rest now is history. Sustainability is the potential new threat, if ignored or taken for granted. Sustainability has become a new mantra, a philosophy of sorts. It however means different things to different people. If one takes the literary meaning of the word, it simply...

May 1, 2017
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