May 2020
06May

What are the implications for pension funds coming out of coronavirus crisis?

By Janet Rabovsky Last August, I wrote about whether central banks were creating a financial bubble with their coordinated easing programs intended to spur economic growth and/or lift inflation. In January 2020, I wrote about the end of the economic cycle, the potential for a recession and what that might mean for positioning an investment portfolio. Little did I know, when I wrote these articles, that we would be experiencing further central bank action as a result of COVID-19,...

May 6, 2020
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01May

US. How The Pandemic Is Making The Retirement Crisis Worse — And What To Do About It

The coronavirus crisis has torn the Band-Aid off the financial fragility of many Americans. With an unemployment rate between 15% and 20%, bank accounts draining, and the Dow down 23% in the first quarter, things are dreadful for millions of people. But Americans in their 50s and 60s nearing retirement may be among the most endangered. Many already weren’t on track for retirement, with little or no savings. Now, the COVID-19 downturn threatens to further undermine America’s vulnerable public...

May 1, 2020
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April 2020
30Apr

South Africa: The Rules Around Pensions in a Time of Mass Job Losses

In addition to the stress faced by employees who might lose their jobs during the crisis engendered by Covid-19, there is the added concern of whether their pension contributions will remain safe or fairly managed. The Financial Services Conduct Authority (FSCA) warned, at the end of March, that many distressed employers might default on their employees’ contributions to retirement funds, as a direct consequence of Covid-19’s impact on businesses and the economy. While the FSCA reminded the public that...

April 30, 2020
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30Apr

South Africa: The Rules Around Pensions in a Time of Mass Job Losses

In addition to the stress faced by employees who might lose their jobs during the crisis engendered by Covid-19, there is the added concern of whether their pension contributions will remain safe or fairly managed. The Financial Services Conduct Authority (FSCA) warned, at the end of March, that many distressed employers might default on their employees' contributions to retirement funds, as a direct consequence of Covid-19's impact on businesses and the economy. While the FSCA reminded the public that...

April 30, 2020
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29Apr

What the Economic Downturn Could Mean for Pension Plans

By Mark Miller Investing guru Bill Bernstein has compared investors in defined-contribution plans to airline passengers sent to the cockpit to fly the plane. Bernstein would much prefer a retirement system that relies on defined-benefit pensions, with their professional management and automatic participation. The unfolding coronavirus crisis underscores the value of professional pension pilots--and the structure of defined-benefit plans, which don't rely on short-term market performance to meet near-term obligations. The same claim cannot be made for the 401(k) or IRA...

April 29, 2020
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20Apr

US. We Need a New Social Contract for the Coronavirus

Our collective behavior will be the primary determinant of whether we can keep this virus in check. A team of infectious disease epidemiologists has calculated that we must reduce our social contacts by 65 percent from what they were before the virus started spreading. Everyone wants to get the country back to work, school, and together again as soon as possible. On Friday, the Trump administration announced it wants to do that in phases and allow each governor...

April 20, 2020
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20Apr

Ireland. Concern growing as social welfare budget nears breaking point

Concern is growing across Fianna Fáil and Fine Gael over the capacity of the Department of Social Protection to continue to fund the cost of the coronavirus shutdown without an emergency estimate. The scale of the fiscal challenges are so steep one senior Government source warned: ‘The cost of dealing with coronavirus and its impact, especially on the Social Protection budget, may compel Fine Gael and Fianna Fáil to escalate the process of government formation.’ Fianna Fáil and Fine Gael are...

April 20, 2020
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17Apr

Australia’s Morrison Wants Pensions to Fund Company Bailouts

Australia’s Prime Minister Scott Morrison wants the nation’s pension funds to take more action to cushion the blow from the coronavirus crisis. In an interview with the Australian Broadcasting Corporation’s 7:30 program Thursday night, Morrison said the nation’s A$2.95 trillion ($1.9 trillion) pension pot should be used to bail out companies as the government “is not the only economic actor in this event.” “I’d like to see the industry and broader superannuation funds playing a more active role in...

April 17, 2020
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17Apr

Milliman analysis: Public pensions hammered by COVID-19 economic volatility, shedding $419 billion in market value in Q1

Milliman, Inc., a premier global consulting and actuarial firm, today released the first quarter 2020 results of its Public Pension Funding Index (PPFI), which consists of the nation's 100 largest public defined benefit pension plans. During Q1 2020, the overall funded ratio for these plans suffered the single largest quarterly drop in the history of the PPFI, decreasing from 74.9% to 66.0% between Jan 1 and March 31. Economic volatility from the COVID-19 pandemic resulted in a $419 billion...

April 17, 2020
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16Apr

Pension pots around the world during COVID-19

Governments around the world are springing into action to leverage and safeguard pension pots during the COVID-19 economic and market turmoil. Australia in March allowed workers to withdraw $10,000 for this financial year and the next from their superannuation savings if their employment has been affected by COVID, in a move that was panned by the opposition and industry funds lobby. Australia is not the only country to allow early access to retirement savings during COVID-19 - the United States...

April 16, 2020
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