Defined Benefit Archives - Page 7 of 11 - Pension Policy International

19AprApril 19, 2023

UK. ‘The current pensions system is not fit for purpose’

By Stephanie Hawthorne The death knell for defined benefit pension provision has been tolled many times, even if the final 'coffin nail’ has not quite yet been hammered into its lid. Millions of ordinary workers, from journalists, railway workers to shop assistants in WH Smith, enjoyed DB pensions without appreciating just how good a perk they were, until it was almost too late. What a failure in communications. Sadly, we have almost reached a tipping point when there will be no return...

April 19, 2023

News, OP Ed, Op-EdDefined Benefit, System sustainability, UK

03AprApril 3, 2023

UK. DB pensions show resilience despite market turbulence

The PwC Buyout Index recorded a surplus of £120bn in March, with the drop in gilt yields driving a reduction of £40bn on the previous month. Meanwhile, the Low Reliance Index also continues to show a sizable surplus of £290bn. This index assumes schemes invest in low-risk, income-generating assets like bonds, meaning they are unlikely to call on the sponsor for further funding. The resilience of pension schemes to short term market shocks is something the Pensions Regulator (TPR) highlighted...

April 3, 2023

NewsDefined Benefit, Returns, UK

31MarMarch 31, 2023

Does Common Ownership Affect Employee Welfare? Evidence from Corporate Pension Funding

By Charles Hsu, Zhiming Ma & Kaitang Zhou This study examines the effect of common institutional ownership on corporate pension funding. We posit that a common owner’s incentive to maximize shareholder value may come at the cost of employee welfare. Consistent with this prediction, we find robust evidence that firms with common ownership demonstrate greater pension underfunding than firms without common ownership. This effect increases with firms’ value-added activities, common owners’ shareholding, duration of ownership, and portfolio size. It decreases...

March 31, 2023

Articles, Pension Management2023, Defined Benefit, Funding

17FebFebruary 17, 2023

Putting Labor’s Capital to Work for Labor: Restoring a Worker-Centric Vision of Fiduciary Duty

By David H. Webber This report has two goals: first, to illustrate how the legal concept of fiduciary duty, designed to protect worker retirement funds, has been captured and distorted in ways that harm workers. Second, to propose means of restoring fiduciary duty to its proper purpose. The state-level fiduciary duties addressed in this report govern the investment of up to $10 trillion in assets and directly shape the retirements of 26 million working-class Americans. They are also just about...

February 17, 2023

Articles, Labor Market2023, Defined Benefit, Pension Management, Public Pensions

26JanJanuary 26, 2023

Should Labor Abandon Its Capital? A Reply to Critics

By: David H. Webber Several recent works have sharply criticized public pension funds and labor union funds (“labor’s capital”). These critiques come from both the left and right. Leftists criticize labor’s capital for undermining worker interests by funding financialization and the growth of Wall Street. Laissez-faire conservatives argue that pension underfunding threatens taxpayers. The left calls for pensions to be replaced by a larger social security system. The libertarian right calls for them to be smashed and scattered into individually-managed...

January 26, 2023

Articles, Labor Market, Pension Management2023, Defined Benefit, Public Pensions, Regulation, US

20DecDecember 20, 2022

Conversion from DB to DC: The EU Pension Custodian

By: Hans van Meerten Worldwide we see a move to DC schemes. Most – if not all countries – choose the operate DB next to DC. However, in The Netherlands, the legislator choose for so-called conversion: transforming 'old' DB- to 'new' DC. In 2011, the Dutch legislator introduced the so called 'Pension Custodian'. It could only be used for the Dutch 2nd pillar DC IORP, the PPI. This Pension Custodion should *not* be confused with the IORP II Custodian. However, with the implementation of...

December 20, 2022

Articles, Pension design2022, Defined Benefit, Defined Contribution, EU, Netherlands

20DecDecember 20, 2022

US. Pension Risk Transfer Market Keeps Setting Records

The U.S. pension risk transfer market showed no sign of slowing in the third quarter of 2022, as market activity continues to reach new levels The year’s first quarter saw $5.3 billion in sales split about evenly between single premium buy-ins and buyouts, according to data from financial industry research organization LIMRA. That mark was 40% higher than 2021’s first quarter and the highest first-quarter result on record. There were no buy-in contracts sold in Q2, but single premium buyout sales...

December 20, 2022

NewsDefined Benefit, Risk, US

24NovNovember 24, 2022

More than 70,000 UK university staff go on strike over pay and pensions

Up to 2.5 million students could face disruption as tens of thousands of university staff begin industrial action on Thursday in what has been billed as the biggest strike in the history of UK higher education. More than 70,000 staff, including lecturers, librarians and researchers, are due to take part in the first of three days of strike action over pay, working conditions and pensions, with pickets expected at 150 universities. Read also UK. MPs told ‘illegal’ LDIs fanned gilt crisis The...

November 24, 2022

NewsDefined Benefit, UK

21NovNovember 21, 2022

Japan seen setting 2023 pension rise below inflation

Japan is expected to curb pension payment rises at rates below that of inflation, according to Nippon Life Insurance's research arm. NLI Research Institute has forecast an inflation rate of 2.5% for full-year 2022, but it expects the government to set the increase in pension payments for those aged 68 and above at only 1.8% for next year. It expects those aged 67 and younger to get a pension rise of 2.1% in 2023. Although there are worries that the financial...

November 21, 2022

News2022, Defined Benefit, Inflation, Japan

28OctOctober 28, 2022

Discounting and the Market Valuation of Defined Benefit Pensions

By luca larcher & Francis Breedon We investigate how defined benefit pension schemes of FTSE firms are valued by the equity market, focusing on how future liabilities are discounted (since UK data allows us to estimate the duration of pension liabilities fairly accurately). We find that equity market valuation is consistent with discounting without allowing for credit risk. This differs from the approach used in published accounts for which IAS 19 (and SFAS No. 158, its US equivalent) allows for...

October 28, 2022

Articles, Pension design2022, Defined Benefit, UK

April 2023

UK. ‘The current pensions system is not fit for purpose’

UK. DB pensions show resilience despite market turbulence

March 2023

Does Common Ownership Affect Employee Welfare? Evidence from Corporate Pension Funding

February 2023

Putting Labor’s Capital to Work for Labor: Restoring a Worker-Centric Vision of Fiduciary Duty

January 2023

Should Labor Abandon Its Capital? A Reply to Critics

December 2022

Conversion from DB to DC: The EU Pension Custodian

US. Pension Risk Transfer Market Keeps Setting Records

November 2022

More than 70,000 UK university staff go on strike over pay and pensions

Japan seen setting 2023 pension rise below inflation

October 2022

Discounting and the Market Valuation of Defined Benefit Pensions