October 2023
24Oct

U.S. state pension plans’ funding ratios fall in Q3

U.S. state pension plans' aggregate funding ratios fell in the third quarter to the lowest level since the end of 2022, according to Wilshire Advisors estimates. For the quarter ended Sept. 30, the estimated ratio dropped by 3 percentage points from three months earlier to 75.2%, the result of an estimated 3% decrease in asset values exacerbated by an estimated 0.8% increase in liability values. It is the lowest estimated ratio since Dec. 31, when Wilshire estimated an aggregate funding ratio...

October 24, 2023
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23Oct

US. Private equity is past its peak, warns Pulitzer Prize-winning

A new business book calls into question the business model of private equity and argues the strategy won’t generate the same returns as in prior decades. Since the 1970s and 1980s, firms such as Apollo Global Management, Blackstone, Carlyle Group and KKR & Co., among others, made money in leveraged buyouts, more recently dubbed private equity, in which the firms buy up companies using investor assets, leverage them and aim for more efficiencies and higher profits. Institutional investors have come to...

October 23, 2023
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20Oct

Understanding Financial Vulnerability Among Asians, Blacks, and Hispanics in the United States

By Andrea Hasler, Annamaria Lusardi, Olivia S. Mitchell & Alessia Sconti The COVID-19 crisis has brought to light the deeply rooted financial struggles that many people face in America, and it also exacerbated racial inequality. In particular, minority communities have been disproportionately impacted by the pandemic in many ways, making them ideal targets for efforts to promote financial well-being. This paper examines the financial vulnerability of Asians, Blacks, and Hispanics in the United States, along with potential drivers, using data...

October 20, 2023
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20Oct

US Public Pension Funding Poised to Rebound in 2023 Reporting

The aggregate funded ratio for U.S. state and local retirement systems is expected to improve to 78.8% in fiscal 2023 from 75.0% in fiscal 2022 when final numbers are released, according to Equable Institute’s mid-year update to its State of Pensions 2023 report, as unfunded liabilities are forecast to have declined an estimated $200 billion to $1.39 trillion over the year. The funding growth is a turnaround from the previous fiscal year, when the national average funded ratio for U.S. state and...

October 20, 2023
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19Oct

US. Inflation Spurs Rethink of Retirement Savings Strategy, Survey Shows

Two-thirds of Those Surveyed Aren't Confident They Will Be Able to Retire When They Want Inflation is creating more worries for retirement savers, with many now changing how they are saving and investing to meet those goals, a new survey shows. Persistently higher prices from inflation is leading 60% of retirement plan participants to think differently about retirement, according to the 2023 Global Retirement Survey from MFS Investment Management. Three-in-four said they now need to save more for retirement than they originally thought,...

October 19, 2023
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19Oct

UK. DWP taskforce launches new pensions guide consultation

A taskforce set up by the Department for Work and Pensions (DWP) has launched a consultation on a new guide. The guide includes 30 recommendations for how the UK pensions sector can better incorporate social factors into investment decisions. The Taskforce on Social Factors (TSF) consultation aims to help pension schemes address the risks and seize opportunities of the “social” element in environmental, social, and governance (ESG) investing. The TSF was established in February 2023 and includes representatives from pensions schemes, asset...

October 19, 2023
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19Oct

US. The Racial Retirement Gap in 7 Facts

Building a financially secure retirement is an uphill climb for many Americans, but it’s especially steep if you are Black. The numbers paint a stark picture. Black workers ages 51 to 64 are the least likely among all racial and ethnic groups to have a retirement account, according to a July 2023 report from the U.S. Government Accountability Office. When they do have one, their median balance is far below that of similarly aged white adults across all income levels. The savings...

October 19, 2023
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18Oct

US. Corporate pension funded status drops

The average corporate pension funded status dipped to 104% in September from 104.4% the previous month, based on data tracked by NISA Investment Advisors for its Pension Surplus Risk index. In July, the funded status was 105.4%. NISA's PSRX, which measures the funded status volatility of U.S. corporate pension plans, rose to 6.9% in September. It was the third consecutive monthly increase. The PSRX measures a one standard deviation change in the funded status over a year. Hence, there is about...

October 18, 2023
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18Oct

UK. Regulatory change is pension schemes greatest concern

The 2023/24 edition of Aon’s Global Pension Risk Survey – published every two years for over a decade - charts the actions, plans and concerns of UK DB pension schemes. The UK survey had a total of 204 responses, covering DB schemes of all different sizes, from the relatively small (less than £100 million) to the very large (over £10 billion). This year, 63 per cent of respondents were trustees, including professional trustees, while a quarter were pension managers,...

October 18, 2023
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17Oct

US. DOL working on pension risk transfer rule review amid hot market

While pension risk transfer (PRT) deals continue to break records, federal regulators are nearing a deadline for review and recommendations of Interpretative Bulletin 95-1. Issued by the Department of Labor in 1995, IB-95 lays out the fiduciary standards for selecting an annuity provider for a pension risk transfer. Under the rule, pensions must consider the provider’s investment portfolio, size relative to the annuity contract, level of capital and surplus, liability exposure, and availability of state government guaranty associations. According to provisions in the...

October 17, 2023
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