July 2020

24Jul

Relabeling, Retirement and Regret

By Jonathan Gruber, Ohto Kanninen, Terhi Ravaska Focal retirement ages are a central feature of Social Security programs around the world, and provide a potentially powerful tool for policy makers who are interested in reforming retirement systems to address the growing funding shortfalls. But these tools often come hand in hand with significant changes in the financial structure of Social Security that can have independent, and potentially deleterious, impacts on retirees. In this paper, we use a major reformulation...

July 24, 2020
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24Jul

Ticking Time Bomb: The Hidden Pension Deficit’ – Critical Study of Post Crisis Reforms and Financial Viability of Current Pension System

By Bhanu Laur Management of pension schemes has always been a difficult task for governments and the challenges that governments are facing today are growing faster than many countries anticipated. Pension plans have evolved overtime as public and private sector schemes slowly switching to PAYG system of funding and the uncertainty over current contributors’ future is growing. However, the recent financial crisis turned attention towards this hidden deficit of the countries where pension funds around the world lost significant...

July 24, 2020
Articles, System Sustainability,
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24Jul

Some of The World’s Biggest Pension Systems Are Failing Women

Even before Covid-19 shuttered economies across the world, many women faced retiring with less savings than men. Now, that gap is set to widen further in some of the world’s biggest pension systems. Read also Germany. Siemens to co-operate with Raisin on pensions Women already typically earn less than men and take more time out from the workforce to have children, resulting in diminished pension pots. And as coronavirus lockdowns smash industries such as air travel, tourism, retail and hospitality,...

July 24, 2020
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24Jul

Canadian pension funds rebound in Q2 with 9.9% return

Canadian defined benefit plans posted positive investment returns in the second quarter, recovering all of the losses from the previous quarter, Northern Trust pension universe data found. For the quarter ended June 30, the median plan in the Northern Trust Canada Universe returned 9.9%, up from -7.1% in the first quarter, according to the findings released Thursday. Canadian DB plans benefited from the recovery following March's poor equity performance due to the economic impact of the COVID-19 pandemic. "Despite...

July 24, 2020
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24Jul

US. COVID-19 Underscores Need to Address Retirement Savings Gaps

Addressing the 2020 NAPA D.C. Fly-In Forum this week, two members of the House Ways & Means Committee shared their thoughts on how the economic stress caused by the pandemic has shined a spotlight on the need to better align retirement savings incentives. “I actually believe, long term, the biggest issue for the United States is retirement security,” noted Rep. David Schweikert (R-AZ). “If you look at the U.S. demographics, we have so many of our Baby Boom...

July 24, 2020
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23Jul

Mexico Unveils Pension Reform Bill that will Boost Worker Pensions

Mexican workers will get a major boost in their retirement benefits after the government and private sector ironed out the details of a pension reform that is expected to become law by early next year, the Finance Ministry said on Wednesday. Read also Changes under Mexico’s planned pension reform The plan presented by Finance Minister Arturo Herrera sees pensions for the average worker rising some 40%, even as worker contributions to the pension system remain unchanged. "This is a big,...

July 23, 2020
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23Jul

Chile’s Senate approves pension reform law

Chile's Senate on Wednesday approved a measure allowing citizens to withdraw up to 10 percent of their pension funds to help mitigate the effects of the coronavirus pandemic. Read also COVID-19 Relief Packages Help Fuel Ultra-Low Interest Rates The bill, approved by a 29-13 vote with one abstention, will now return to the lower house Chamber of Deputies where it has already been given the green light for a final and decisive vote. Read also Covid-19 May Destroy Chile’s Iconic...

July 23, 2020
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23Jul

World Bank makes recommendations to improve pensions coverage in Ghana

“If a new or existing informal sector scheme is given sole responsibility for covering the cocoa farmers, economies of scale could be achieved. This will allow outreach to other groups of informal sector workers in a financially viable manner”, the World Bank asserted in its pensions coverage in the informal sector Africa report for 2019. However the World Bank report indicated that the coverage of the elderly through contributory pension schemes is not expected to improve. But the state...

July 23, 2020
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23Jul

WhatsApp to pilot projects to deliver credit, insurance and pension to users in India

WhatsApp plans to offer credit, insurance and pension products to lower-income individuals and those in rural areas in India and help digitize local small and medium-sized businesses as the Facebook service looks to make a digital payments push in its biggest market by users. The instant messaging app maker has been working with banks -- including ICICI, Kotak Mahindra and HDFC -- in India for the past year to explore ways to bring financial services to individuals who have...

July 23, 2020
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22Jul

UK. Impact of COVID-19 on life expectancy could reduce pension scheme liabilities by up to £90bn

Impact of COVID-19 on life expectancy could reduce pension scheme liabilities by up to £90bn New XPS forecasting shows long-term vulnerabilities in pension schemes following the pandemic. In some scenarios the long-term economic impact of COVID-19 on life expectancy could be 50% higher than the short-term impact of the pandemic. The economic impact on schemes' assets is also a significant consideration. Especially for those schemes holding growth assets and/or with low hedging ratios. Read also UK. Cybercrime and Pensions...

July 22, 2020
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