September 2024
17Sep

US. Optimism about Retirement Preparedness Growing

Headlines to the contrary, a recent survey found that confidence is growing among American employees concerning their ability to meet their long-term financial and retirement goals. According to the fourth annual Protected Retirement survey from the Nationwide Retirement Institute, more than 6 in 10 (65%) workers say they are on the right track when it comes to financial preparedness for retirement. This figure rises to 71% for those aged 22-34 years old, which is a 15-point increase from 2023. This improvement,...

September 17, 2024
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13Sep

Pension Risk Transfer Monitor

By Legal & General  In this latest edition of our Pension Risk Transfer (PRT) Monitor, we off¬er a side-by-side analysis of the two largest PRT markets globally – the US and UK. We expect PRT volumes to remain elevated across the next decade. Based on current levels, more than £250 billion of combined UK and US volumes are likely to be secured by insurers in the next 3 years alone. In this bulletin we reflect on the first half of...

September 13, 2024
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13Sep

The future of retirement security: An international comparison through the lens of adequacy, sustainability, equity and plan design

By Surya Kolluri, Catherine Reilly & David Richardson The average retiree can now expect to spend about two decades in retirement, roughly double the time from 50 years ago. Along with extended lifespans, the number of workers per retiree is declining around the world and ever fewer workers have access to defined benefit (DB) plans that promise a guaranteed income in retirement. Instead, most workers save for retirement through defined contribution (DC) plans, which do not automatically convert savings into...

September 13, 2024
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12Sep

IBM completes $6 billion pension buyout with Prudential, its second in 2 years

International Business Machines Corp., Armonk, N.Y., purchased a group annuity contract from Prudential Insurance Co. of America to transfer $6 billion in defined benefit plan liabilities. The purchase of the contract, which closed Sept. 11, transfers the benefit-paying responsibility for about 32,000 retirees and beneficiaries covered by the IBM Personal Pension Plan, according to an 8-K filing with the SEC. According to the filing, the transferred participants represent “certain pension benefits that began to be paid prior to 2016.” Prudential will take on the...

September 12, 2024
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12Sep

US pension fund allocation to private debt falls short of target

US pension funds were below their median target allocation to private debt in August, a reflection of the challenges in analyzing the growing number of private debt participants. The median target allocation across 117 US pension funds was $188 million, while the median actual allocation was $112 million, according to S&P Global Market Intelligence data. This suggests that pension funds had a $76 million median net underallocation to private debt as of Aug. 21. The majority of pension funds analyzed failed to meet...

September 12, 2024
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11Sep

US. As Pension Funding Levels Fell in 2022, Higher Contributions Helped States Manage Debt

From fiscal year 2021 to 2022, the reported funding gap for state pension plans—the disparity between promised benefits and available assets—jumped by $439 billion to $1.27 trillion. The increase, largely fueled by investment losses, highlights how volatile financial markets continue to expose state and local governments to risk. Yet, despite poor investment returns, in 2022, 49 states still contributed enough to their pension plans to meet a key target, the net amortization benchmark, which measures whether employers’ payments are sufficient...

September 11, 2024
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10Sep

Study Suggests Reforming U.S. Retirement System with Modern Framework

After studying international retirement systems, researchers from the TIAA Institute are proposing a new U.S. model featuring a “hybrid” system consisting of the best elements from defined contribution (DC) and defined benefit (DB) plans. In noting that the average retiree can now expect to spend about two decades in retirement, roughly double the time from 50 years ago, the study (The Future of Retirement Security) looks at how seven countries have adapted their retirement systems to account for these extended...

September 10, 2024
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09Sep

Buoyant markets pump up largest retirement plan assets to $22.6 trillion in 2023

Assets of the world’s top 300 retirement plans increased by 10% in 2023 to a total $22.64 trillion, staging a recovery from their 12.9% decline in 2022, according to the according to the latest annual survey by Pensions & Investments and Willis Towers Watson PLC's Thinking Ahead Institute. The plans benefited from the recovery of markets, which have picked up momentum and generally did better in 2023, said Jessica Gao, London-based director at the Thinking Ahead Institute. “But we still have interest-rate pressure...

September 9, 2024
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06Sep

UK and US pension risk transfer market to exceed £250bn in next three years

Legal & General has today released the latest edition of its Pension Risk Transfer (PRT) Monitor, which analyses industry trends and market outlooks in the UK and US. Findings from the report show: The UK PRT market has completed an estimated £20bn of buy-ins and buyouts in the year to date The US market experienced a record breaking first half, estimated at $26bn Both markets are on track for one of their largest years ever, with a significant increase in the number...

September 6, 2024
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04Sep

US. Pressure Mounts on Public Pension Funds to Divest Chinese Investments

As the world revisits decades of globalization and diminishes the interdependence and integration of the world’s economies, and as interests of China and its allies become less aligned with the interests of the U.S., Europe and their blocs, many institutional investors are caught between generating alpha and legislators who want their states’ funds to be completely divested from the world’s second-largest economy. Geopolitical worries have led legislators in several states to mandate that their state pension funds divest from Chinese...

September 4, 2024
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