Risk Archives - Page 10 of 37 - Pension Policy International

31MayMay 31, 2023

UK. Derisking well funded DB schemes may be an opportunity missed

Funding is reaching record levels and DB schemes are now in a position of strength. Current regulations compel schemes to target ultra low investment returns, but taking risk and therefore return out of DB pension investments may be going too far, representing a ‘missed opportunity’ to better invest £1.5 trillion of UK DB pension scheme assets. Steve Hodder, partner at LCP, said: “For 20-plus years, regulatory focus has been on ‘slowing down’ DB schemes through reducing investment risk. This was...

May 31, 2023

NewsDefined Benefit, Funding, Pension Management, Risk, UK

22MayMay 22, 2023

UK. Treasury to bear risk of unfunded legacy public sector schemes

A policy paper published on 15 May states that the cost control mechanism (CCM) for new public sector schemes will exclude those legacy schemes closed to new members. Following a review by the government actuary and a series of consultations, the government will now bear “full risk” of costs related to unfunded legacy schemes, which includes civil servants, teachers and NHS staff. The paper states: “The government believes this is the right approach to take in order to ensure the CCM...

May 22, 2023

NewsFunding, Risk, UK

18MayMay 18, 2023

US. Pension Funds Appear Unfazed by Potential US Default

With the X-date looming for when the U.S. government could default on its bonds and welch on paying other obligations due to the standoff over raising the federal debt ceiling, there is scant panic among pension plans. While they have little to say publicly about the prospect of a default, one CIO said, “We have enough liquidity to get through this, and we think [the impasse in Washington] will be resolved quickly.” Typically, plans exude an outward calm. A spokeswoman for...

May 18, 2023

NewsPension Management, Risk, US

17MayMay 17, 2023

US. Pension risk transfer market off to strong start this year

The U.S. pension risk transfer market had a very strong first quarter, with an estimated $6 billion in total volume, according to a report from Legal & General Group. The estimate exceeds the previous record for a first quarter set last year at $5.3 billion. Legal & General noted that PRT activity has traditionally been the slowest during the first half of the year and projects a total of $23 billion in volume for the first half of 2023. The...

May 17, 2023

NewsPension Management, Risk, US

25AprApril 25, 2023

PPG Industries unloads $309 million in U.S. pension liabilities

PPG Industries Inc., Pittsburgh, purchased a group annuity contract in March to transfer $309 million in U.S. pension plan liabilities to insurance companies. The chemical company disclosed the transaction in its 10-Q filing with the SEC on April 21. The filing did not disclose the number of insurers or their names. It is at least the third pension risk transfer transaction completed by the company in the past seven years. In 2016, PPG Industries purchased two group annuity contracts to transfer $1.6...

April 25, 2023

NewsPension design, Risk, US

21AprApril 21, 2023

Management of Retirement Funds by Republican vs. Democrat States: Understanding the Differences

By Mustafa O. Caglayan, Edward R. Lawrence & Robinson Reyes-Peña As most of the state pensions in the USA deal with their respective funding crisis, we compare the management approaches undertaken by funds located in the states that are governed by Republicans vis-à-vis funds that are located in states governed by Democrats. We find that pension funds located in states governed by Republicans display a lower funding ratio compared to the pension funds located in states governed by Democrats. The...

April 21, 2023

Articles, Pension Management2023, Funding, Investment, Risk, State Pensions, US

20AprApril 20, 2023

UK. DB pension trustees urged to assess risk management amid rising insolvencies

Defined benefit (DB) pension scheme trustees have been encouraged to review how they are managing their pension risks after data from the Office for National Statistics (ONS) showed that company insolvencies increased in March. According to the ONS, total insolvencies were up by 16 per cent compared to March last year, while the number of compulsory liquidations more than doubled, up by 106 per cent year-on-year. Furthermore, total bankruptcies and debt relief orders increased by 28 per cent over the same...

April 20, 2023

NewsRisk, Sustainability, UK

11AprApril 11, 2023

As Clients Live Longer, Firms Step Up Efforts Addressing Longevity Risk

People are living longer, and it has created rising concern among retirees and their financial advisors about whether they will have enough to live on in retirement. Several firms have acknowledged this longevity risk and are urging advisors to speak to their clients and promoting certain financial products that can help. According to Milwaukee-based Northwestern Mutual, there is a 50% chance that a 65-year-old man will live beyond age 86. Given that increased life expectancy, retirement savings have to last...

April 11, 2023

NewsAging, Longevity, Risk

30MarMarch 30, 2023

US. Pension Risk Transfers Spiked in 2022 due to Higher Interest Rates, Report Shows

Rising interest rates drove increased pension risk transfer activity in 2022, as these transactions totaled $52 billion in premiums last year—the highest total in the decade Aon has been tracking the information, according to a recent report. A total of 568 pension risk transfer transactions were made last year, with IBM headlining this activity by completing a $16 billion retiree lift-out in September 2022. This was the second-largest PRT transaction in U.S. history, Aon’s U.S. Risk Transfer report for March...

March 30, 2023

NewsPension Management, Risk, US

28MarMarch 28, 2023

Key demographic trends that will impact the global economy

The global population is currently experiencing irreversible demographic shifts, from rapid urbanisation to low birth rates. A combination of economic, social, environmental, and political factors has accelerated this transition, as outlined below. The following demographic trends will significantly impact the global economy for decades to come. Urbanisation The United Nations (UN) estimates that over two-thirds of the world’s population will live in cities by 2050. Generally, urbanisation can be a positive phenomenon in improving national and individual economic performance, reducing poverty, and improving...

March 28, 2023

NewsAging, Income, Risk

May 2023

UK. Derisking well funded DB schemes may be an opportunity missed

UK. Treasury to bear risk of unfunded legacy public sector schemes

US. Pension Funds Appear Unfazed by Potential US Default

US. Pension risk transfer market off to strong start this year

April 2023

PPG Industries unloads $309 million in U.S. pension liabilities

Management of Retirement Funds by Republican vs. Democrat States: Understanding the Differences

UK. DB pension trustees urged to assess risk management amid rising insolvencies

As Clients Live Longer, Firms Step Up Efforts Addressing Longevity Risk

March 2023

US. Pension Risk Transfers Spiked in 2022 due to Higher Interest Rates, Report Shows

Key demographic trends that will impact the global economy