November 2023
09Nov

Public Retirement Systems Need Sustainable Policies to Navigate Volatile Financial Markets

Over the past decade, policy reforms and increased financial contributions have dramatically improved the cash flow situation of some of the nation’s most troubled state pension plans. Thanks to these changes, which include reforms to benefit designs, a commitment to fiscal discipline, and greater monitoring of the financial health of public retirement systems, no state is at risk of pension plan insolvency. Nevertheless, many states still have more to do to ensure the long-term sustainability of pension promises. As recently...

November 9, 2023
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08Nov

U.S. Treasury to propose rule to ban investment on China’s tech

Deputy Treasury Secretary Wally Adeyemo said Nov. 7 the Treasury Department hopes to propose a rule "in the coming weeks" to implement the president's executive order prohibiting investments in certain Chinese technology sectors. "I think the president and his counterparts across the G7 have made very clear that our goal is not to decouple but rather to derisk the relationship with China," Adeyemo said at the Securities Industry and Financial Markets Association's annual meeting. 2 House lawmakers ask Treasury to 'urgently'...

November 8, 2023
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07Nov

US. Low earners need more retirement income

Social Security alone is simply not enough, new Vanguard study confirms People often assume that the retirement needs of low-wage workers are covered by Social Security's progressive benefit formula. That assessment has never been correct. Social Security was never intended to be the sole source of income for any group of retirees. Social Security replacement rates -- benefits as a percentage of preretirement earnings -- fall far below the generally accepted benchmarks. Low earners are more likely to claim early, which results...

November 7, 2023
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07Nov

U.S. corporate pension plan funding ratio climbs to new high for year

The overall funding ratio at the 100 largest U.S. corporate pension plans edged up to 104.2% as of Oct. 31 – a new high for the year, according to the latest Milliman 100 Pension Funding Index released on Nov. 6. The funding ratio was 103.6% at the end of September. An investment return of -2.68% in October, the third consecutive month of losses, was offset by a significant increase in discount rates to 6.2% from 5.84%, which contributed to the gain. Assets...

November 7, 2023
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03Nov

US. UAW’s Big 3 Retirement Deals Fall Short of Pension Revival

The United Auto Workers had an overarching goal last summer as it headed into negotiations with Detroit’s Big Three: claw back as many concessions as possible from the Great Recession, then keep pushing for an even better deal. In many ways it succeeded, with retirement being a notable exception. While the union won big improvements for savings plans, its long-shot endeavor to bring back pensions for younger members went nowhere, even as it won historic gains in pay and the elimination...

November 3, 2023
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02Nov

US. Fed keeps interest rates unchanged

For the second consecutive meeting, Federal Reserve officials on Nov. 1 held interest rates steady as the central bank aims to quell inflation without overcooling the economy. The Federal Open Market Committee left the federal funds rate unchanged at a range of 5.25% to 5.5% following its two-day meeting. Since March 2022, the Fed has raised the funds rate, which is now at its highest level since 2001, 525 basis points. "Given how far we have come, along with the uncertainties...

November 2, 2023
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01Nov

UK household wealth has tanked and it’s a sign of what could happen in the US

Household wealth in the UK has fallen sharply over the last two years in part thanks to high interest rates, and the factors that led to the drop suggest a similar scenario could be heading for the US. New research from the think tank Resolution Foundation found that median household wealth in the UK fell 21% from the start of 2022 through the third quarter of 2023, representing a loss of £2.2 trillion (US$2.7 trillion). The fall is due, in large...

November 1, 2023
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October 2023
31Oct

US department of labor announces proposed rule to protect retirement savers’ interests by updating definition of investment advice fiduciary

The U.S. Department of Labor today announced that its Employee Benefits Security Administration has proposed a retirement security rule updating the definition of an investment advice fiduciary under the Employee Retirement Income Security Act. Aligned with the Biden-Harris administration’s efforts to protect retirement investors, the proposal would require trusted investment advisers to adhere to high standards of care and loyalty when they make investment recommendations and avoid recommendations that favor their financial and other interests at the expense of retirement savers. The updated...

October 31, 2023
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26Oct

US. Pension risk transfer pipeline remains robust, even if falling short of 2022 record

The U.S. pension risk transfer market remains robust in 2023, although it may not break the record for dollar volume set in 2022, experts say. This is despite a new record for dollar volume in the first half of 2023, totaling $22.5 billion in premiums paid for pension buyout transactions, according to research firm LIMRA. In 2022, the total volume was $48.3 billion, driven primarily by corporate pension funds' improving funding ratios, which have enabled many to pull the trigger on...

October 26, 2023
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26Oct

U.S. equities gain favor as aging population invests for longer lifespans

A recent report from Deutsche Bank contradicts concerns about America's aging population straining healthcare and pensions, suggesting that healthier, longer-working individuals will adjust their investment and consumption patterns, thus averting a fiscal crisis. The report highlights the global rise in life expectancy and the proportion of the median age—now above 40%, a significant increase from 35% in 1986. The authors note an uptick in working years beyond traditional retirement age, leading to higher returns via a shift towards stocks over...

October 26, 2023
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