February 2020

24Feb

‘Massive Risk’ Drives ESG Bets at $108 Billion Finnish Funds

Two of Finland’s biggest pension funds, with combined assets of $108 billion, are determined to make their portfolios carbon neutral over the next decade and a half, in a race to dodge the fallout of global warming before it’s too late. “Climate change is such a massive risk factor for companies in the future,” Anna Hyrske, head of responsible investments at Ilmarinen Mutual Pension Insurance Co., said in an interview. Climate change has been on the agenda for years,...

February 24, 2020
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18Feb

UK. Legal & General completes first pension risk transfer deal for housing

Legal & General (L&G) has invested £100m of long term debt financing in its affordable housing business – opening the door for UK pension money to back the provision of such homes. Secured against the income stream of a UK-wide portfolio of operational affordable housing, this represents its first deal to generate attractive matching-adjustment, compliant direct investments from affordable housing for its growing annuity portfolio. A further £175m of development finance is being provided by a consortium of external investors...

February 18, 2020
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04Feb

Longevity and risk transfer: a booming market

Last year marked a record year for the UK’s pension risk transfer (PRT) market, with an estimated £50bn (€59bn) worth of transactions completed, including buy-ins, buyouts, and longevity swaps. The total was almost double that of the previous year, according to Mercer, which compiled the figures, and there were several innovative approaches to buy-ins and buyouts as demand from pension funds and competition among insurers reached new highs. Communications company Telent conducted the biggest single deal of the...

February 4, 2020
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January 2020

23Jan

Ford to take $2.2 billion fourth-quarter loss related to pensions

Ford Motor Co. said late Wednesday it expects to take a fourth-quarter pretax charge of $2.2 billion related to pension obligations that will cut down on its net income. After taxes, the $2.2 billion loss is expected to slash Ford’s net income by about $1.7 billion, Ford F, -1.42% said in a filing. As it is a special item, the loss will not affect adjusted profit or adjusted per-share profit, the car maker said. It also did not...

January 23, 2020
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21Jan

Head of Canada Pension Fund Warns on Rush to Iliquid Assets

The biggest global funds should all be monitoring their investments in illiquid assets, according to the head of Canada’s largest pension fund. “I do ring the alarm bell on not to be too invested in illiquid assets,” Mark Machin, chief executive officer of the Canada Pension Plan Investment Board, said in a Bloomberg Television interview Monday at the World Economic Forum in Davos. “We are very comfortable with our risk models and what we would do in various lurches...

January 21, 2020
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09Jan

Inside a Pension Fund’s Search for a Risk Management System

The LACERA investment team recommended MSCI’s risk analytics over competitors including BlackRock’s Aladdin system and FactSet. After a lengthy search, the investment team at the Los Angeles County Employees’ Retirement Association has settled on a new risk analytics provider. The investment team has recommended that its board hire MSCI Analytics to provide total fund analytics for the $59.6 billion pension fund, according to the agenda from a LACERA investment board meeting held on Wednesday. MSCI beat out rivals including FactSet and...

January 9, 2020
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07Jan

Athene Closes $6 Billion in Pension Risk Transfer Transactions During 2019

Athene Holding Ltd. ("Athene") (NYSE: ATH), a leading retirement services company, announced it has reached approximately $6.0 billion in total pension risk transfer (PRT) transactions for 2019, which includes approximately $800 million from a recently completed funded reinsurance transaction with a leading U.K. insurance company. Under the terms of Athene’s inaugural transaction in the U.K. market, which closed December 19, 2019, the Company will reinsure a block of pension benefit liabilities through its wholly owned subsidiary Athene Life Re...

January 7, 2020
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December 2019

12Dec

UK Pension Risk Transfer Market to Quadruple in Decade

The UK’s bulk annuity market is forecast to quadruple over the next decade, driven mainly by lower pricing as more pension plans mature and additional reinsurers enter the UK market, according to consulting firm Mercer. By the end of 2019, Mercer said it expects the bulk annuity market in Great Britain to exceed £40 billion ($52.6 billion), with the total UK risk transfer market, including longevity swaps, forecast to reach £50 billion. Mercer said it has also...

December 12, 2019
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11Dec

Danish Pension Assets Swell to $680 Billion as Funds Add Risk

Denmark’s pension industry has grown to more than double the country’s gross domestic product after adding about $100 billion this year alone. “The first nine months of 2019 saw considerable growth in the companies’ balance sheets as a result of substantial returns on pension wealth,” the central bank said on Tuesday. That followed a substantial increase in holdings of asset classes outside the traditional bond and stock allocations. Pension funds have been shifting their allocation to alternative assets as...

December 11, 2019
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05Dec

Changing Risks in Retirement

It is important to understand from the very outset how changing risks are primarily what separate retirement income planning from traditional wealth management. Retirees have less capacity for risk, as they become more vulnerable to a reduced standard of living when risks manifest. Those entering retirement are crossing the threshold into an entirely foreign way of living. Reduced earnings capacity Retirees face reduced flexibility to earn income in the labor markets as a way to cushion their...

December 5, 2019
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