June 2020
01Jun

US pension plans warned they will run out of money by 2028

The weak financial condition of seven US public pension plans threatens to deplete their assets by 2028, leading to severe risks for the living standards of thousands of American employees and retired workers. Many US public pension plans had not fully recovered from the 2007/08 financial crisis before coronavirus struck, triggering turmoil across financial markets. The correction in the US stock market has increased the long-term structural problems across the entire US public pension system, particularly for the weakest...

June 1, 2020
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May 2020
11May

US. Public Pensions Could Suffer for Years from Pandemic Losses

US public pension plan sponsors and administrators are likely entering a period of fiscal stress, and rising pension obligations caused by the sudden pandemic-induced recession are expected to be felt for years by US state and local governments, according to a report from S&P Global Ratings. S&P said US public pension funds in aggregate lost approximately $850 billion during the first quarter of the year, and that they would need to rebound sharply during the second quarter to maintain...

May 11, 2020
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08May

Egypt increases wages, pensions by LE 100B in 20/21: Prime Minister

"Egypt’s new budget draft for fiscal year 2020/2021 includes an article stipulating the increase of wages and pensions by LE 100 billion," Prime Minister Mostafa Madbouli said Thursday. Madbouli added at a press conference at the headquarters of the Cabinet that the state was keen to alleviate the burden off the Egyptian citizen during the coronavirus crisis. “Every year we need nearly 800 jobs for young people,” he stated. “We all, as citizens, must be aware that delayed...

May 8, 2020
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08May

US. J.P. Morgan report estimates pandemic’s impact on unfunded retirement benefits

Banking giant J.P. Morgan issued a report estimating the impact of the COVID-19 pandemic and economic downturn on states’ unfunded pension and retiree healthcare liabilities, noting Connecticut would have to pay nearly 40 percent of its revenue for the next thirty years to pay off nearly $70 billion in unfunded liabilities. Connecticut had the fourth highest cost to pay off its liabilities, with Hawaii, New Jersey and Illinois faring worse. According to the report, the economic downturn added another...

May 8, 2020
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06May

Kenya. State pension pay to rise 29pc next year

The Treasury will spend nearly a third more on paying pensioners in the fiscal year beginning July, with the actual total amount to be spent for the first time expected to exceed Sh100 billion. According to estimates released to Parliament, the total pensions and gratuities paid will amount to Sh119.19 billion, from revised estimates of Sh92.49 billion of the fiscal year ending in June. This is Sh26.7 billion or 29 percent higher. It underlines the extent of liabilities the public has...

May 6, 2020
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06May

Kenya. State pension pay to rise 29pc next year

The Treasury will spend nearly a third more on paying pensioners in the fiscal year beginning July, with the actual total amount to be spent for the first time expected to exceed Sh100 billion. According to estimates released to Parliament, the total pensions and gratuities paid will amount to Sh119.19 billion, from revised estimates of Sh92.49 billion of the fiscal year ending in June. This is Sh26.7 billion or 29 percent higher. It underlines the extent of liabilities the...

May 6, 2020
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01May

Costs and Potential Funding of Expanded Public Pension Coverage in Asia

By Peter Morgan, Long Q. Trinh Public pension burdens in most emerging Asian economies are still relatively small. However, there are a number of reasons to believe that they will increase markedly in the coming years. First, many Asian economies will face rapidly ageing populations, which will raise pension and other old‐age‐related spending dramatically. Second, as economies develop, political pressures to expand the coverage of public pensions and raise pension benefits will likely increase. The first objective of this...

May 1, 2020
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April 2020

24Apr

Coronavirus will make US cities feel the pressure of pension debt

Municipal pension debt is among the many aspects of the economy that have been severely impacted by the coronavirus pandemic. COVID-19 not only exposes, but also further threatens the already-weak fiscal health of municipal retirement plans. Inaction on this front could mean insolvent pension plans dragging some of the nation’s largest cities into bankruptcy. After all, when the stock market takes a hit, so do pensions. This is because most of the typical pension funds’ income is from returns...

April 24, 2020
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23Apr

EBRI: Pandemic likely to worsen U.S. retirement savings deficit

The impact of the coronavirus pandemic on U.S. retirement readiness using middle-of-the road risk assumptions appears to be manageable, according to projections by the Employee Benefit Research Institute. EBRI estimates that the $3.68 trillion aggregate retirement deficit for all U.S. households age 35-64 will increase by 4.5% or $166.2 billion if market losses for the year are equivalent to first-quarter 2020 losses, a risk assumption that EBRI defines as intermediate. Under EBRI's pessimistic scenario, that in which market losses...

April 23, 2020
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21Apr

US Public Pension Funding Levels Plunge to 66% in Q1

The funded level of the 100 largest US public defined benefit pension plans plunged to 66% during the first quarter from 74.9% at the end of last year, according to Milliman. It was the largest quarterly drop in the history of the firm’s public pension funding index (PPFI), and it eliminated the funding level improvements made during 2019. Volatility from the COVID-19 pandemic resulted in net negative cash flow of approximately $24 billion and a $419 billion loss in...

April 21, 2020
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