June 2021
11Jun

Kenya. Pension payments fast-tracked as Treasury proposes stiffer measures

National Treasury CS Ukur Yatani revealed that a national retirement policy that will harmonise pension-related laws and enhance accountability is in the pipeline and will be ready by the end of this year. While unveiling Kenya’s 2021/2022 Ksh3.03 trillion budget in Parliament, Yatani said the policy seeks to achieve comprehensive pension coverage across the formal and informal sector so as to protect the interests of beneficiaries and rights of pension contributors. “Mr. Speaker, given the disparities in the design of the...

June 11, 2021
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May 2021
20May

How Competitive Are Income Annuity Providers Over Time?

By David Blanchett, Michael S. Finke, Branislav Nikolic The 2019 SECURE Act provides safe harbor protections to employers who evaluate the costs of providing guaranteed income including gathering information on competing providers. Annuities can be more difficult to evaluate than mutual funds because annuity expenses can be opaque, financial strength matters, and insurer competitiveness can change over time. We find significant variation in the payout rates across providers over time. While the payout rankings of annuity companies (e.g., best to...

May 20, 2021
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07May

4.8 million South Africans have unclaimed benefits worth R42 billion

About 4.8 million South Africans have unclaimed pension benefits, according to the Financial Sector Conduct Authority (FSCA). The unclaimed pension pot is worth R42 billion. Millions of, perhaps, cash-strapped people may not know how to claim what is rightfully theirs. Africa Melane asked Kabelo van der Merwe (Project Lead of Unclaimed Benefits at Liberty) how to find out if you are one of the 4.8 million, and how to claim if you are. If you want to check if you are the beneficiary...

May 7, 2021
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April 2021
29Apr

What Explains Low Old-Age Income? Evidence from the Health and Retirement Study

By Olivia S. Mitchell, Robert L. Clark, Annamaria Lusardi We examine respondents in the Health and Retirement Study (HRS) to observe how their financial situations unfolded as they aged. We focus on low income older adults and follow them over time to identify the factors associated with having low income at baseline and thereafter. We find that (a) real income remained relatively stable as individuals approach and enter retirement, and progress through their retirement years, and (b) labor force participation...

April 29, 2021
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12Apr

What to Do (and Not Do) With a Target-Date Fund After Retiring

Target-date funds are a staple of employer-sponsored retirement funds, due in part to their ease of use. The funds adjust allocations over decades, starting with big equity exposures, then glide gradually into more fixed income. But some investors don’t stick with them, particularly after they retire. Thinking they can do a better job of managing their money than a target-date funds’ manager, some investors shift the money into individual retirement accounts where they invest in other types of funds. Is that...

April 12, 2021
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March 2021
18Mar

Kenya: Former Telkom Workers Wallow in Poverty As Pension Scheme Holds On to Payout

On a bright Wednesday morning, Agnes Ouma sits on a blue plastic chair outside her neighbour's house, in Jamhuri estate on Ngong road. She is going through her phone book. Midway, she pauses and laments: "Nobody receives my calls these days." She thinks that most of her contacts have blacklisted her. Because whenever she calls, it is to ask for financial help. Since retrenchment, she says, she has been reduced to a borrower -- borrowing without any clear plan to repay. "No...

March 18, 2021
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February 2021
23Feb

British Airways defers £450m of pension payments as Covid cuts flights

British Airways has struck a deal to delay £450m of pension deficit contributions as the company struggles through Covid travel restrictions that have left most of its planes grounded during the pandemic. The carrier’s owner, International Airlines Group (IAG), has also reached a final agreement over a £2bn loan that will give the company a larger financial cushion until Covid restrictions are eased. BA, which usually pays £37.5m a month into the New Airways Pension Scheme (NAPS), has struck a deal...

February 23, 2021
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January 2021

21Jan

The Benefit of Diversified Guaranteed Income for Retirees: Combining Immediate Fixed and Immediate Variable Annuities

By David Blanchett This paper explores the potential benefits of developing a retirement income that considers both immediate fixed annuities (IFA) and immediate variable annuities (IVA) using a stochastic utility model combined with a scenario framework. Optimal annuity allocations vary considerably across household type, but certainty equivalent retirement income increases by 20 percent, on average, when incorporating annuities. Total annuity allocations increase when both IFAs and IVAs are considered, and retirees realize only approximately two-thirds of the benefits of...

January 21, 2021
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December 2020

21Dec

US. Annuities vs. Pensions: What Retirement Plan Advisors Should Know About ‘De-Risking’

Pension obligations are a major liability on many corporate balance sheets. Retirees are living longer than ever, sometimes claiming pension payments for decades. Advisors to pension plans may be called upon for suggestions of how to de-risk employer-sponsored benefit plans. Weighing available options is crucial. Read also US. Retirement taxes are not more tolerable One idea that’s gaining traction: annuities. In recent years, Lockheed Martin, FedEx, Raytheon, Alcoa and others have transferred billions of dollars worth of pension liabilities to...

December 21, 2020
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