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
Articles, Savings, , ,
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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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07Mar

Employee Representation and the Risk of Corporate Pension Plans

By Nicola Heusel We analyze the effect of direct labour representation in supervisory boards on the risk of corporate pension plans.We exploit employee representation requirements mandated by German labour law and find that firms with parity employee representation reduce pension plan risk both in terms of funding as well as in terms of investment risk. Source: SSRN

March 7, 2020
Articles, Labor Market, , ,
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04Mar

Milliman Launches Index to Track Pension Risk Transfer Market

By Michael Katz Actuarial and consulting firm Milliman has launched a pension buyout index that estimates the average cost of a pension risk transfer strategy. The firm said it created the Milliman Pension Buyout Index (MPBI) because plan sponsors considering a plan termination or de-risking strategy need to be able to monitor the annuity market, which continues to show strong growth. According to the LIMRA Secure Retirement Institute, almost half of all defined benefit pension plans in the US...

March 4, 2020
News, OP Ed, Slider,
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03Mar

UK. Pension transfer market needs regulation, says industry

Ministers are facing calls to give powers to regulators to supervise the corporate pension transfer market after claims that companies are pressuring employees to quit their valuable retirement schemes. Senior figures in the pension industry said a voluntary code of practice that is meant to prevent abuses by employers was no longer working. The concerns centre on how employers have the ability to initiate exercises under which workers who are members of their defined benefit pension schemes can swap...

March 3, 2020
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February 2020

27Feb

The Netherlands: Pensions funds will change risk-free rate – Rabobank

The Dutch newspaper Telegraaf reported this morning that all parties involved in the pension reform discussion agreed on changing the risk-free rate term structure for Dutch pension funds. The pension agreement has been redefined and only one new pension contract remains. Bas van Zanden, Senior Pension Analyst at Rabobank, expects a decrease in demand for hedging by Dutch pension funds. Key quotes “The pension contract will split up all pension funds into an: Accrual phase – Every...

February 27, 2020
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26Feb

Athene Announces Pension Buyout Agreement With Armstrong World Industries

Athene Holding Ltd. (“Athene”) (NYSE: ATH), a leading retirement services company, announced a pension buyout agreement with Armstrong World Industries (“Armstrong”) (NYSE: AWI), a leader in the design and manufacture of innovative commercial and residential ceiling, wall and suspension system solutions in the Americas. Under the terms of the transaction, Athene’s wholly-owned Iowa-domiciled life insurance subsidiary, Athene Annuity and Life Company (“AAIA”), and Athene’s wholly-owned New York-domiciled life insurance subsidiary, Athene Annuity & Life Assurance Company of New York...

February 26, 2020
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