March 2021
05Mar

Vietnam gets its first private defined contribution plan

Dragon Capital VietFund Management, a Ho Chi Minh-based money management firm, has launched Vietnam's first private sector retirement savings vehicle. The defined contribution plan, with government tax incentives for employees and employers alike, offers savers three fund options — a relatively high-risk 50-50 split between equities and bonds, a 65% bond-35% stock mix and a conservative 80% bond-20% stock mix. Savings can be withdrawn tax-free upon reaching retirement age, currently 62 for men and 60 for woman. Life insurers in Vietnam have...

March 5, 2021
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February 2021
02Feb

Puerto Rico Government Plan-to-Private Plan Rollovers Allowed

On January 20, 2021, the Puerto Rico Department of the Treasury (Departamento de Hacienda, commonly known as “Hacienda”) issued Administrative Determination No. 21-01 (AD 21-01), which provides that lump-sum distributions from the retirement plan for Puerto Rico government employees are eligible for direct and indirect rollovers into Puerto Rico–qualified retirement plans maintained by private-sector employers. In practice, however, this determination is unlikely to have much of an impact on the operation of private-sector employer plans. Background Since the 1940s,...

February 2, 2021
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December 2020

02Dec

Latin American private pensions fuel cross-border demand: report

The research puts total AuM for the four administradoras de fondos de pensiones (AFP/Afore) systems at $574bn at the close of 2019. Including Brazil's complementary pension system, which also had a positive year, total regional AuM stands at $1.05trn. Flows into the AFP/Afore pension managers in Chile, Mexico, Colombia, and Peru reflect a gradual upward trend that mimics increasing formality in labor markets and higher salaries. The inflows are also among the most reliable in Latin America. While cross-border...

December 2, 2020
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November 2020

05Nov

Pension Superpowers and Financial Markets in the Sino-American Century

By M. Nicolas J. Firzli In this primer published in the Feb. 2020 issue of Private Debt Investor (PDI), Nicolas J. Firzli, World Pensions Council, looks at how institutional asset owners will come to the fore in the new geo-economic context defined by renewed Sino-American "coopetition" across ASEAN countries, Australia, Eastern Europe and the MENA area, Brexit and the resurgence of one-nation conservatism in Britain, the slow, relative decline of the European Union and the secular rise of "Pension...

November 5, 2020
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October 2020

29Oct

Pension Reform in Mexico: Guiding Principles for Creating a Sustainable and Balanced System for Private Sector Workers

By Guillermo Zamarripa & Gustavo A. Del Angel From 1995 to 1997, Mexico engaged in a major pension reform. With that change, the system migrated from a pay as you go defined benefit model to a defined contribution one. The pension system reform permitted a sustained increase of financial savings in Mexico from 1999 to 2019. Savings managed by the pension funds -the Afores1- reached 16.6% of GDP as of the end of 2019. However, after more than two...

October 29, 2020
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20Oct

Govt seeks to overturn Pension Schemes Bill amendment defeats

The government is seeking to overturn the four Pension Schemes Bill amendment votes it lost in the House of Lords in the summer by removing them from the bill. In a House of Commons Notices of Amendments publication, Pensions Minster, Guy Opperman, outlined the removal of the House of Lords’ amendments. The amendments relate to commercial pensions dashboards, transaction facilities on dashboards, reporting on fairness to members of collective defined contribution (CDC) schemes, and open defined benefit (DB) schemes...

October 20, 2020
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15Oct

The DC Future Book: In association with Columbia Threadneedle Investments

By Lauren Wilkinson, Daniela Silcock and John Adams Compared to previous generations of pensioners, current and future retirees will: • Live longer on average, • Receive their State Pension later, • Be more likely to be dependent on Defined Contribution (DC) savings, • Have no, or low, levels of Defined Benefit (DB) entitlement, and • Flexibly access their DC savings. These changes increase the risks borne by pension scheme members and the complexity of decisions people must make at and...

October 15, 2020
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September 2020

21Sep

Romania. The Evolution of the Private Pensions Market in the First Six Months of the Year 2020

The value of the total assets under management, at the level of the entire private pensions system, has reached the amount of 68.57 billion RON, at the date of 30.06.2020, exceeding in Euro equivalent the value of 14 billion, increasing by 6.31%, as compared to December, 2019. Moreover, the share of private pensions in the Gross Domestic Product[1], at the end of June, 2020, was of 6.39%, above the level of December, 2019. 'The economic context in the first...

September 21, 2020
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15Sep

(Mis)Allocation Effects of an Overpaid Public Sector

By Tiago Cavalcanti, Marcelo Rodrigues Santos There is a large body of evidence showing that for many countries the structure of wages and pensions and the labor law legislation are different for public and private employees. Such differences affect the occupational choice of agents and might generate some type of misallocation. We develop a life-cycle model with endogenous occupational choice and heterogeneous agents to study the implications of an overpaid public sector. The model is estimated to be consistent...

September 15, 2020
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August 2020

19Aug

MetLife Board Dodges Lawsuit Over $500 Million Annuity Error

MetLife Inc.'s board doesn’t have to face oversight claims over the insurer’s practice of downplaying its liabilities by wrongly counting pensioners as dead if they didn’t respond to its letters, instead of consulting official records, a Delaware Chancery Court judge ruled. The shareholder derivative lawsuit “supports an inference of failure of prudence on the part of the defendants; and a lack of imagination perhaps,” Vice Chancellor Sam Glasscock III wrote Monday. But “the plaintiffs require too many attenuated inferences...

August 19, 2020
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