January 2021

25Jan

UK. FCA publishes latest data on the defined benefit transfer market

The FCA has published its latest data on the defined benefit (DB) transfers market, covering October 2018 to March 2020. It has noted that there are “signs of improvement” in respect of DB transfer advice; in particular, there has been a significant reduction in conversion rates. This indicates that firms are starting to act more in line with the FCA’s expectations, as advice to transfer out of a DB scheme will not usually be in the client’s best interests....

January 25, 2021
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22Jan

US. Multiemployer pension plans could soon see relief

Legislation to help struggling multiemployer pension funds is to be introduced Thursday in the House and could be headed for passage if bundled with a COVID-19 relief measure now before Congress. The proposal also calls for some funding relief for single employer plans through extended amortization periods and pension interest rate smoothing changes. The proposed Emergency Pension Plan Relief Act of 2021 is based on similar multiemployer pension reform legislation proposed in the last session of Congress as part...

January 22, 2021
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21Jan

UK. Pension bill passes last hurdle

The Pension Schemes Bill is to receive Royal Assent and become law imminently after being approved by the House of Lords in the final stage of its parliamentary journey. The bill managed to avoid a round of parliamentary ping pong after peers accepted the House of Commons amendments in a hearing yesterday (January 19). Also Read: Thousands of UK savers advised to give up final-salary pensions It was reintroduced to the House of Lords at the beginning of last year...

January 21, 2021
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19Jan

Thousands of UK savers advised to give up final-salary pensions

Tens of thousands of savers were recommended to give up valuable final-salary pensions by advisers using a popular charging model now banned owing to concerns it was fuelling mis-selling, according to data published by the regulator. Last October advisers were barred from providing defined benefit pension transfer advice using the contingent fee model, where they were only paid if the client decided to go ahead with a transfer recommendation. The Financial Conduct Authority acted after becoming concerned the contingent...

January 19, 2021
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18Jan

Australia. Why we should stick with the 12pc super guarantee rate

By Karen Maley If Treasurer Josh Frydenberg was hoping that the eagerly awaited Callaghan retirement income review might help him resolve the fiendishly difficult political problem of what to do with the superannuation guarantee levy, he'll be deeply disappointed. The Morrison government is facing intense pressure from a group of hardline backbenchers to scrap the long-legislated increase in employers' compulsory contribution to their workers' super from 9.5 per cent of wages to 12 per cent by 2025. Read more @AFR

January 18, 2021
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14Jan

Pension Reform Primer : Issues, Challenges, Options and Arguments in Pension Reform

By World Bank The World Bank Pension Reform Primer aims to provide a comprehensive toolkit for policy makers on designing and implementing pension reform. It is based on continuously updated information from countries that have introduced reforms emphasizing the role of privately-managed individual retirement accounts. Their experience offers a number of useful lessons for policy makers elsewhere. The Bank set out a conceptual framework for fundamental pension reform in "Averting the Old Age Crisis: Policies to Protect the Old...

January 14, 2021
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14Jan

U.K. government cuts administration fees for smallest DC pots

U.K. defined contribution plans with £100 ($136) in assets or less will be exempt from paying administration fees, the government said Wednesday. A consultation into fee cap rules aimed at protecting automatically enrolled plan participants from paying high fees resulted in the government keeping the fee cap at its current level set at 0.75% of assets under management and administration. The consultation was launched in June. However, due to additional concerns raised by respondents to the consultation around the...

January 14, 2021
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06Jan

India. New fee structure opens the doors wider for pension fund managers: PFRDA chief

‘Increased fees will ensure both profitability and investment in infra’ Pension regulator PFRDA has now taken a big initiative to revamp the pension funds management structure in India and position the industry for strong decadal growth that could take the overall assets under management of the National Pension System (NPS) to ₹30-lakh crore by 2030. The regulator has now come out with a new Request for Proposal (RFP) for selection of sponsors of pension funds for NPS, throwing open the door for...

January 6, 2021
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January 2021
01Jan

Supervising mandatory funded pension systems: issues and challenges

By Gustavo Demarco, Rafae Rofman, & Edward Whitehouse The regulation and supervision of pension funds is a critical part of building public confidence in a funded-pension system. This paper argues that confidence is best bolstered by an independent, autonomous and transparent supervision agency, particularly when previous systems had failed. The choice between proactive and reactive supervision depends on previous experience of selfregulation in a country’s financial sector. The paper examines four key areas of supervision in detail: institutional, financial, membership and...

January 1, 2021
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01Jan

Collecting and transferring pension contributions

By Rafael Rofman & Gustavo Demarco Collecting social security contributions is an important operational issue in all types of pension systems. Many regimes are plagued by poor compliance and weak, inefficient administration. Some countries have tried to introduce an automatic incentive to contribute by moving systems closer to"actuarial fairness,"where pension benefits are more strictly related to individual contributions. Examples include the systems of individual accounts introduced in a range of countries in Latin America and Eastern Europe. But in these...

January 1, 2021
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