July 2020
02Jul

UK DB Pension Schemes Lose up to £250m a Year Due to Use of Less Tax-efficient Funds, Research by AMX and Northern Trust Reveals

UK defined benefit (DB) pension schemes are losing out on over £250m of additional income per year in their global equity portfolios because they are investing via less tax-efficient fund structures than those available, according to new research from The Asset Management Exchange (AMX) and Northern Trust (Nasdaq: NTRS), conducted by Broadridge Financial Solutions. Read also UK. £127bn transferred out of workplace schemes since 2015 – ONS UK pension schemes, as tax-exempt investors, are entitled to apply for reclaims or...

July 2, 2020
News, Slider, , , , ,
Read more...

June 2020
09Jun

Bahamas. ‘Baffled’ Over Failure To Reform Public Pensions

The Chamber of Commerce's chief executive says he is "baffled" at the government's failure to reform public sector pensions by making civil servants contribute towards their own retirement costs. Jeffrey Beckles, speaking on a webinar hosted by the Chartered Financial Analyst (CFA) Society of The Bahamas, said: "I can't find a model in the world that has been using the same system where it has proven successful or profitable, and I don't know what causes us to feel that...

June 9, 2020
News, Slider, , , , ,
Read more...

May 2020
29May

Pension Finance

By M Barton Waring, Robert C Merton Pension plans around the world are in a state of crisis. U.S. plans alone are facing a total accrued liability funding deficit of almost $4 trillion (of the same order of magnitude as the federal debt), a potential financial catastrophe that ranks among the largest ever seen. It has become clear that many government, corporate, and multi-employer pension sponsors will not be able to cope with this crippling debt and may default...

May 29, 2020
Books, Pension design, System Sustainability, ,
Read more...
08May

The DB landscape Defined benefit pensions 2019

By The Pensions Regulator Welcome to the fourth edition of the DB landscape publication, TPR’s annual reporton the defned beneft (DB) pension schemes that we regulate. We have taken this information from the pension schemes register on 31 March 2019 and included DB an hybrid occupational schemes with more than one member. Our publication differs from the Pension Protection Fund (PPF)’s Purple Book as their data includes only those DB scheme, eligible for the lifeboat fund. We present the...

May 8, 2020
Books, System Sustainability, ,
Read more...

April 2020

07Apr

Freezing A Defined Benefit Plan To Reduce Current Year Contribution Obligation

Defined benefit pension plans, including cash balance plans, require a contribution each year, which is primarily used to fund the benefits which participants accrue (i.e., earn) during the plan year. The annual required contribution may also include an amount needed to make up a shortfall in a prior year in the investment return on plan assets. In most defined benefit pension plans, a participant earns a benefit for a plan year after working 1,000 or more hours during that...

April 7, 2020
News, Slider, , ,
Read more...
03Apr

The Political (In)Stability of Funded Pension Systems

By Roel M. W. J. Beetsma, Oliwia Komada, Krzysztof Makarski, Joanna Tyrowicz We analyze the political stability of capital funded social security. In particular, using a stylized theoretical framework we study the mechanisms behind governments capturing pension assets in order to lower current taxes. This is followed by an analysis of the analogous mechanisms in a fully-edged overlapping generations model with intra-cohort heterogeneity. Funding is efficient in a Kaldor-Hicks sense. Individuals vote on capturing the accumulated pension assets and...

April 3, 2020
Articles, System Sustainability, ,
Read more...

February 2020
07Feb

Pensions and Legal Policy: Lessons on the Shift from Public to Private

By Amanda Cooke This monograph explores the historical position of pensions law in the UK and the recent influences which have led to the introduction of Auto-Enrolment and subsequent reforms. Alternative models, such as the US and Australia are also considered as well as the function of law in bringing about political changes. The question of saving for retirement is of national and international importance and many governments are wrestling with the issue of how to deal with the pension...

February 7, 2020
Books, Regulation, , , ,
Read more...

June 2019

14Jun

The Great Pension Debate: Finding Common Ground

By Robert L Brown, Stephen Eadie In the never-ending debate about finding an optimal pension model, many proponents start the discussion at extreme ends of the pension model paradigm. At one extreme is a traditional, fully guaranteed defined-benefit (DB) pension plan. In this plan, all of the risks are born by the plan sponsor given that plans are fully funded. While such plans are growing rare today that is the starting point for many in this debate. At the...

June 14, 2019
Adequacy, Articles, Pension design, Slider-Left, , ,
Read more...

June 2018

25Jun

Retiring Employees, Unretired Debt: The Surprising Hidden Cost of Federal Employee Pensions

By William B. P. Robson (C.D. Howe Institute) & Alexandre Laurin (C.D. Howe Institute) Ottawa provides its employees with defined-benefit pensions that promise relatively generous benefits to a large current and former workforce. Being largely unfunded, these plans require future taxpayer support. They also create taxpayer risk because the economic value of the benefits they will provide can fluctuate by tens of billions of dollars annually. Current accounting practices understate this burden and the risks these plans create for taxpayers...

June 25, 2018
Articles, Management, System Sustainability, ,
Read more...

July 2017

30Jul

Optimal Longevity Risk Transfer and Investment Strategies

By Samuel H. Cox (University of Manitoba), Yijia Lin (University of Nebraska) & Sheen Liu (Washington State University) Given the rising cost of maintaining defined benefit (DB) pensions, there has been a surge of activities in recent years by DB plan sponsors to transfer their pension risk through strategies such as buy-ins and buy-outs. As buy-in and buy-out transaction pipelines grow, insurers actively participating in the buy-in and buy-out markets are exposed to significant longevity risk embedded in pension schemes....

July 30, 2017
Articles, Investing, Management, Pension design, ,
Read more...