April 2017

07Apr

US Pension Plans Look to the Canadian Model

Given the rising Pension Benefit Guaranty Corporation (PBGC) premiums and persistently low interest rates, many US pension plans have been adapting some of the practices of what Cerulli Associates call The Canadian Model. The Model is centered around three attributes, according to Cerulli: cost mitigation, a well-diversified investment portfolio across several asset classes and geographies, and a large appetite for illiquid investments. While the Canadian pension market is considerably smaller than the US pension market—$1.2 trillion in assets compared to $6...

April 7, 2017
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06Apr

Here’s what the US could learn from Singapore’s plan for aging workers

At Chatters, a small café in the lobby of a hospital, the staff frothing cappuccinos and managing the register aren't your typical young baristas. That's because every employee must be at least 55. "It keeps my mind moving," said Sally Chung, 72, a retired accountant, who manages the café and does the books. The café's age requirement reflects a demographic trend this city-state of 5.6 million people is trying to confront: the population is getting old — fast. In 2015, one in...

April 6, 2017
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06Apr

President Trump’s Directive Just Cost Investors $181 Million This Year

A US regulation requiring retirement advisers to put their clients’ best interests before their own profits when advising clients was slated to go into effect next Tuesday, but President Trump’s Labor Department on Tuesday announced a decision delaying the fiduciary rule by 60 days amid pressures from the financial industry. The problem is that even the 60-day delay —let alone any further decision to scale back the rule or rescind it outright —will impact working people’s retirement accounts. Even the...

April 6, 2017
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04Apr

US. Debt Market Lures Billions as Verizon, GM Pursue Pension Trade

Employers saddled with swelling pension obligations and higher government fees on those liabilities are finding some relief in the corporate debt market. Delta Air Lines, Verizon Communications Inc., and FedEx Corp. have issued more than $14 billion in bonds this year in which some proceeds were flagged for bolstering their retirement programs, according to data compiled by Bloomberg. Last year, General Motors Co. did the same, and International Paper Co. had a debt sale as part of a plan to...

April 4, 2017
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04Apr

The reason underfunded pensions are a disaster waiting to happen

While most corporate employers shifted from pension plans to 401(k)s after the latter’s creation in the early 1980s, governments still offer pensions to many employees. And those pensions have left retirees and taxpayers in a bind that has fueled political battles while continuing to en rich investment consultants and managers: Too-optimistic estimates of market return, which determine how much governments must pay to fund the balance, have left many plans massively underfunded even as the advisers who managed them received...

April 4, 2017
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04Apr

US. CFA Institute Blasts Senate’s Move to Block Auto-Enrollment Retirement Plans

The CFA Institute says moves by politicians to end automatic enrollment of some workers in retirement savings plans are misguided. The group shared its thoughts on Friday, a day after the Senate followed the House and passed a resolution to undo rules helping municipalities and states set up payroll deduction retirement plans that automatically enroll private-sector workers lacking access to such savings programs. Full Content: Think Advisor

April 4, 2017
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March 2017

31Mar

US. Congress could kill state retirement plans

New state-sponsored IRA plans would aim to help small business employees who don't already have access to a retirement savings plan at work -- like a 401(k). But new legislation could stop them before they even begin. The House of Representatives voted along party lines last month to roll back an Obama-era rule that paved the way for these plans. On Thursday, the Senate narrowly passed legislation that takes another step toward finalizing the repeal. Republicans say that under President Obama,...

March 31, 2017
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30Mar

US. The Fed’s pension fund is flashing a warning sign about the Trump trade

Federal Reserve Chair Janet Yellen went out of her way during her March press conference to emphasize the central bank's decision to raise interest rates by a quarter percentage point was predicated on past economic performance, not extrapolations about future policy from the administration of President Donald Trump. "The basis for today’s decision is simply our assessment of the progress of the economy against our long-established goals of maximum employment and price stability," Yellen told reporters on March 15. "There’s...

March 30, 2017
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28Mar

US. Plan sponsors increasingly interested in pension risk transfer

In the United States, 80 per cent of employers sponsoring traditional defined benefit pension plans are interested in pension risk transfer, according to new research from LIMRA Secure Retirement Institute. LIMRA says that in the last few years a shift has occurred in the level of interest in pension risk transfer (PRT). While eight in 10 plan sponsors expressed interest in PRT, four in 10 said they are “very interested”. This is an increase of ten per cent from a...

March 28, 2017
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27Mar

US. Retirement Planning: Boomers Navigate Impact of Financial Crisis

According to a new study, only two percent of middle-income Baby Boomers feel the economy has fully recovered from the financial crisis that began in 2007. The survey, “10 Years After the Crisis: Middle-Income Boomers Rebounding But Not Recovered,” by Bankers Life Center for a Secure Retirement, finds that Boomers' lack of trust in institutions has led to permanent financial impairment. “[Before the Great Recession] Boomers had a clear vision of what a personally satisfying retirement looked like,” said Scott Goldberg,...

March 27, 2017
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