July 2020

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
News, Slider, , ,
Read more...
22Jul

COVID-19 Relief Packages Help Fuel Ultra-Low Interest Rates

The European Insurance and Occupational Pensions Authority (EIOPA) has warned that the current ultra-low interest rate environment—which it said is being fueled by the COVID-19 pandemic and the resulting economic relief packages—represents a key source of systemic risk for insurers for the future. EIOPA said in a recent report that the COVID-19 pandemic and central banks’ response measures to alleviate the impact on the economic activity will contribute to the continuation of the low interest rate environment. It also...

July 22, 2020
News, Slider, , ,
Read more...
22Jul

Covid-19 May Destroy Chile’s Iconic Pension System

If last year’s national convulsion wasn’t enough to break up Chile’s romance with market-friendly technocracy, the spreading civic choler over the miseries brought on by the coronavirus pandemic may finish the job. Yes, President Sebastian Pinera’s speedy measures to combat the outbreak and pump the economy with emergency funds for the most vulnerable households gave the besieged government a breather. Yet the recent 95 to 36 vote by the Lower House to allow Chileans to raid their private pensions...

July 22, 2020
News, Slider, , ,
Read more...
21Jul

US. What The Wild Stock Market Means For Public Pensions

As governments deal with paying for Covid-19 expenses amid falling tax revenue and shrinking budgets, there’s another big bill waiting for them: pension debt. And many could lean on taxpayers to help. Pension plans haven’t released their annual earnings yet, but a recent report from Moody’s Investors Service notes that “investment returns...have almost certainly fallen well short of targets.” The ratings agency estimates that when pension plans tally up their total performance between July 1, 2019 and June...

July 21, 2020
News, Slider, , , ,
Read more...
17Jul

Exposure to the COVID-19 Stock Market Crash and its Effect on Household Expectations

By Tobin Hanspal, Annika Weber, Johannes Wohlfart We survey a representative sample of US households to study how exposure to the COVID-19 stock market crash affects expectations and planned behavior. Wealth shocks are associated with upward adjustments of expectations about retirement age, desired working hours, and household debt, but have only small effects on expected spending. We provide correlational and experimental evidence that beliefs about the duration of the stock market recovery shape households’ expectations about their own wealth and...

July 17, 2020
Articles, Investment, , ,
Read more...
17Jul

Withdrawals from Mexican pension funds soar amid weak labor market

Withdrawals from Mexican pension funds resulting from unemployment soared in June to a record high, according to official data, as the country's labor market continues to suffer. Read also Faced with COVID-19, highest number of Australians tap retirement funds since April Withdrawals during the month totaled 1.86 billion pesos ($83 million), more than twice the 921 million pesos withdrawn in June 2019, according to figures released Wednesday by pensions regulator Consar. Read also FLF Africa launches Financial Literacy for Coronavirus...

July 17, 2020
News, Slider, , ,
Read more...
17Jul

US. Public Pensions Face a COVID-19 Conundrum

Faced with depleting assets, and with state and local governments under fiscal pressure from the COVID-19 recession, public pension plan sponsors have some tough choices ahead of them in order to remain sustainable during economic uncertainty. However, there are widely differing views among economic scholars as to what the most prudent strategy is for state and local governments dealing with low returns on pension investments, aging workforces, and pressure to build portfolios to cover promised future benefits—as well as...

July 17, 2020
News, Slider, ,
Read more...
16Jul

UK. Govt’s ‘landmark’ pensions bill proceeds to Commons

The Pension Schemes Bill, which includes rules for pension dashboards and new powers for the Pensions Regulator, has cleared its first hurdle in the House of Lords. Read also UK. Does benchmarking DB transfers against a workplace pension make sense? The bill, originally announced in the October Queen’s Speech, will now pass into the House of Commons where MPs will debate its measures before it receives Royal Assent and is written into law. Read also UK. Proposed Legislation for Losses...

July 16, 2020
News, Slider, , , , ,
Read more...
16Jul

FLF Africa launches Financial Literacy for Coronavirus Alleviation programme

The Financial Literacy Foundation Africa has launched a Financial Literacy for Coronavirus Alleviation programme (FLICA) which aims to provide education on how to handle economic and financial hardships arising from the Covid-19 pandemic. This continental project will take place in all 46 countries in sub-Saharan Africa and aims to achieve financial independence for eight out of every ten individuals by 2030. “The strategic approach will address attitudinal and behavioral barriers to our goal of financial wellness through public education...

July 16, 2020
News, Slider, , , , ,
Read more...
15Jul

US. Post-pandemic Retirement: Can We Build More Resilient Systems?

Reforming retirement systems is a more urgent imperative globally as the coronavirus pandemic claims jobs, lowers economic growth and investment returns, and threatens to choke funding for already underfunded pension plans. The pandemic is also hastening the imminent insolvency of the Social Security Trust Fund in the U.S., a recent report by the Penn Wharton Budget Model has found. In two recession scenarios the report laid out, the trust fund would run out of money in 2032 or 2034...

July 15, 2020
News, Slider, , , ,
Read more...