January 2024
26Jan

Sustainable Finance and ESG: From Policy Concerns to Transformative Tools

By Peer C. Zumbansen  This article provides an in-depth summary of the inaugural Fall conference on ESG and Sustainable Finance at McGill University, November 2023. The conference was hosted by the SGI CIBC Office for Sustainable Finance (OSF) and the Business Law Platform at McGill’s Faculty of Law. OSF was established under the auspices of McGill’s Sustainable Growth Initiative, a cross-departmental research and collaboration platform committed to cutting-edge scholarship and training on sustainable finance, decarbonisation, green mobility, climate change and...

January 26, 2024
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24Jan

The Ins and Outs of Final Salary Pensions

How do you envision your golden years? For many, it means traveling or just relaxing on sun-kissed beaches, free of the daily grind. Financial security, however, is crucial to a truly idyllic retirement. The golden ticket to that blissful state used to be a final salary pension, but unfortunately, it no longer exists. Today, the pension landscape has radically changed. In place of final salary plans, defined contribution plans like 401(k)s have become more common. As of November 2023, 22% of non-retirees...

January 24, 2024
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12Jan

Pension Systems (Un)Sustainability and Fiscal Constraints: A Comparative Analysis

By Michael Wickens  Using an overlapping generations model, two new indicators of public pension system sustainability are proposed: the pension space, which measures the capacity to pay for pension expenditures out of labour taxation, and the pension space exhaustion probability reflecting demographic uncertainties. These measures reveal that the pension spaces of advanced economies are strikingly different. Most nations have little scope to further finance pensions out of labour income  taxation over the next thirty years. There is no one-size-fits-all solution....

January 12, 2024
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December 2023
01Dec

Augmenting the Funded Ratio: New Metrics for Liability Based Plans

By Sanjiv Ranjan Das, Daniel N Ostrov, Anand Radhakrishnan, Deep Srivastav & Wylie Tollette The primary metric used to determine the health of a liability based plan (LBP) is the funded ratio, which is the ratio of the LBP’s current assets to its present-valued liabilities. The funded ratio, however, cannot accommodate a considerable number of important financial factors, so we suggest three additional metrics of financial health, each connected to the probability of fulfilling the plan’s liabilities. The first two...

December 1, 2023
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November 2023
23Nov

UK to increase state pension by 8.5%, sticks with ‘triple lock’ commitment

Britain's publicly funded state pension will increase by 8.5% from April 2024, finance minister Jeremy Hunt said on Wednesday. The increase is based on average earnings data published in September and was in line with the government's "triple lock" policy on pension changes. The triple lock is a government promise to raise the value of publicly funded pensions by whichever is highest out of the level of earnings, inflation or 2.5%. Ahead of Hunt's budget update statement, media reports had suggested he...

November 23, 2023
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October 2023
20Oct

Mercer CFA Institute Global Pension Index 2023

By CFA Institute & Monash University  The Mercer CFA Institute Global Pension Index benchmarks 47 retirement income systems around the world, highlighting challenges and opportunities within each. Botswana, Croatia and Kazakhstan were added to the mix this year. We also used updated data from the OECD and added some new questions to the integrity sub-index. The Index is made up of three sub-indices, including adequacy, sustainability and integrity, to measure each retirement income system against more than 50 indicators. Each year...

October 20, 2023
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September 2023
14Sep

Minimum interest rate rise a ‘sustainable challenge’ for Swiss pension funds

The increase of the minimum interest rate – Mindestzinssatz – on pension savings to 1.25% recommend by the Swiss federal commission for occupational pensions, BVG-Kommission, is a challenge for pension funds, but sustainable, according to the commission’s president Christine Egerszegi-Obrist. “We held 1% [minimum interest rate] for years. A year ago we had negative interest rates and pension funds suffered considerably, [but] the interest rate landscape has changed, [therefore] we have carefully increased the interest rate,” she told IPE, explaining...

September 14, 2023
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August 2023
25Aug

Sustainable funds return to outperformance in reversal of 2022, says report

Sustainable funds beat traditional funds in the first half of 2023, helped in particular by a rebound in growth stocks, according to research from Morgan Stanley. In a report, the bank’s Institute for Sustainable Investing said the median return for sustainable funds in the first half of this year was 6.9% and traditional funds’ 3.8%. Structural market factors were more favourable to sustainable funds’ positioning in the first half of 2023, according to the report. In 2022, a rapid rise in...

August 25, 2023
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July 2023
20Jul

US. The debate over ESG and retirement plans continues

Part of the ongoing congressional debate over ESG centers on whether these factors should be considered as part of pension and retirement funds. Those of you expecting a resolution should prepare to exercise some patience. One of the most active representatives on the anti-ESG side of the debate is Rep. Andy Barr (R-Ky.), who introduced legislation targeting the use of ESG factors in retirement plan investments June 21. Barr has proposed changes to the Employee Retirement Income Security Act, which...

July 20, 2023
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14Jul

US. Worst American City for Pensions Confronts a $35 Billion Crisis

One of Brandon Johnson’s first moves as Chicago mayor was to buy himself time to address the city’s biggest financial problem: the more than $35 billion owed to its pension funds. Just days after his May inauguration, Johnson persuaded state lawmakers to shelve legislation that would’ve added billions to the pension debt, while pledging to establish a working group to come up with solutions by October. Now, the clock is ticking for the progressive Democrat to fix the worst pension crisis...

July 14, 2023
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