April 2020

29Apr

UK. Pension firms issue warning to savers over transfers

To prevent people from losing out, anyone who wants to shift their money will now get a letter from their scheme stating that a transfer is unlikely to be in their best long-term interests. Pension scheme trustees will warn savers of the risks during the pandemic and urge them to consider the decision carefully. Read also ATP, PFA assets plummet as coronavirus hits The warning letter will be signed by watchdog The Pensions Regulator (TPR) , the Financial Conduct Authority (FCA),...

April 29, 2020
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29Apr

Swedish schemes apply for IORP conversion after rules battle

With two days to go before the deadline, the Swedish financial supervisory agency has now received applications from six of the country’s pension funds to convert to the new status of occupational pension company (tjänstepensionsföretag) under the new IORP II-based regulatory regime. The new act on occupational pension companies (2019:742), which puts the EU directive into Swedish law, was passed by the country’s parliament (Riksdag) in December following a long period of wrangling between stakeholders. The authority, Finansinspektionen (FI),...

April 29, 2020
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14Apr

Athene pays $45 mln fine in first settlement of NY pension transfer probe

Athene Holding Ltd ATH.N agreed on Monday to pay a $45 million civil fine to settle charges it conducted insurance business in New York without a license, the first settlement in a probe into an industry where life insurers take over corporate pension plans. Linda Lacewell, superintendent of New York's Department of Financial Services, said Athene's unlicensed Athene Annuity & Life unit conducted 14 large pension risk transfer transactions covering tens of thousands of policy holders, and engaged in...

April 14, 2020
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03Apr

How People React to Pension Risk

By Nicolas Salamanca, Andries de Grip, Olaf Sleijpen We show that people exposed to greater pension risk are less likely to invest in risky assets. We exploit a reform that links people's future pension benefits to their pension funds' funding ratio—a measure of the fund's financial health—making funding ratios a fund-specific measure of pension risk. The effect of pension risk is stronger for people who are better informed about their pensions, for retirees and pension-age non-retirees, and for wealthier...

April 3, 2020
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03Apr

UK. L&G completes £261mn of pension risk transfer deals in March

UK insurer Legal & General Group plc (L&G) has revealed that its Pension Risk Transfer (PRT) division completed eight transactions over the past month, securing a combined £261 million of pensioners’ benefits during uncertain times. The eight transactions cover UK and U.S. pension schemes and varied in size from as low as £2.2 million to as high as £80 million. L&G notes that on March 27th alone, three separate PRT transactions were signed. Despite the impacts of the ongoing...

April 3, 2020
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March 2020

20Mar

Insurance against Long-Run Volatility Risk: Demand, Supply, and Pricing

By Chuck Fang Despite its importance implied in asset pricing and macroeconomic models, insurance against long-run volatility risk has received little empirical documentation regarding its demand, supply, or pricing. This paper bridges the gap. First, I show that households have directly purchased large quantities of insurance against long- run volatility risk through the minimum return guarantees available in variable annuities, a form of retail retirement and savings product offered by life insurance companies. Total net assets with such insurance...

March 20, 2020
Articles, Investment, Pension Management
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20Mar

Grouping Individual Investment Preferences in Retirement Savings: A Cluster Analysis of a USS Members Risk Attitude Survey

By David P. Blake, Mel Duffield, Ian Tonks, Alistair Haig, Dean Blower, Laura MacPhee Cluster analysis is used to identify homogeneous groups of members of USS in terms of risk attitudes. There are two distinct clusters of members in their 40s and 50s. One had previously ‘engaged’ with USS by making additional voluntary contributions. It typically had higher pay, longer tenure, less interest in ethical investing, lower risk capacity, a higher percentage of males, and a higher percentage of...

March 20, 2020
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19Mar

Finnish unions, employers agree crisis proposals over coronavirus

Finnish trade unions and employers on Wednesday agreed measures to support the labour market and promote temporary changes in legislation to shore up the weakening economy, they said in a joint statement. “The troubles of companies are here and now. Businesses need ways to cope with the corona crisis,” said Jyri Hakamies, the head of industry federation EK. The package - which needs to be approved by the centre-left government - includes measures such as shortening the duration of...

March 19, 2020
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19Mar

UK. Coronavirus scams: greater risk of being a victim of pension fraud

Pension savers face a greater risk of being targeted by fraudsters, research from the All-Party Parliamentary Group on Pension Scams (APPG) has revealed. The government has advised more people to stay at home amid the coronavirus crisis, which could increase their chances of being contacted via phone or online. Investment markets plunging over recent weeks may also make people more susceptible to pension scams as they attempt to recover losses from their retirement savings. The figures show...

March 19, 2020
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18Mar

Antigua and Barbuda . COVID-19 puts thousands of pensioners at risk

A turn for the worse in the spread of the novel coronavirus (COVID-19) could be disastrous for thousands of pensioners who depend on the state to survive. “That timeliness of the benefit payment is what will determine the quality of life for an elderly person that is perhaps afflicted by a COVID-19 infection,” said the Executive Director of the Antigua & Barbuda Social Security Board (ABSSB), David Matthias. According to Matthias, 11,288 people over the age of 60 are...

March 18, 2020
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