February 2023
08Feb

Early Pension Withdrawals in Chile During the Pandemic

By Olga Fuentes, Olivia S. Mitchell & Félix Villatoro Chile, with one of the largest and best funded defined contribution programs in Latin America, held over USD $200 bn in assets at the onset of the Covid-19 crisis, or more than 80% of GDP. Reacting to populist pressures during the pandemic, however, the government gave non-retired participants three separate opportunities to tap into their retirement accounts, leaving some 4.2 million participants with zero retirement savings and draining around $50 bn...

February 8, 2023
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January 2023
23Jan

US. 32% of Savers Tapped Their Retirement Accounts Last Year to Cope With Inflation. That’s a Problem

Inflation surged in 2022, burdening consumers of all ages. If you took a retirement plan withdrawal to cope with inflation, it's imperative that you try to compensate this year. Motley Fool Issues Rare “All In” Buy Alert Higher living costs forced some people to resort to drastic measures. Lawmakers were generous with stimulus aid in 2021, and that helped many Americans cope with the pandemic and subsequent economic crisis. But a troubling thing happened as a result. Consumers suddenly found themselves flush with cash...

January 23, 2023
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September 2022
30Sep

The Safe Withdrawal Rate: Evidence from a Broad Sample of Developed Markets

By Aizhan Anarkulova, Scott Cederburg, Michael S. O'Doherty & Richard W. Sias We use a comprehensive new dataset of asset-class returns in 38 developed countries to examine a popular class of retirement spending rules that prescribe annual withdrawals as a constant percentage of the retirement account balance. A 65-year-old couple willing to bear a 5% chance of financial ruin can withdraw just 2.26% per year, a rate materially lower than conventional advice (e.g., the 4% rule). Our estimates of failure...

September 30, 2022
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26Sep

Nigeria: PenCom Approves Use of 25% Pension Savings for Mortgage

The National Pension Commission (PenCom) has issued Guidelines on Accessing Retirement Savings Account (RSA) of 25 per cent savings to pay equity contribution for residential mortgages by RSA holders. The commission said the approval is in line with Section 89 (2) of the Pension Reform Act 2014 (PRA 2014), which allows RSA holders to use a portion of their RSA balance towards the payment of equity for residential mortgages. PenCom, therefore, directed interested RSA holders to contact their Pension Fund Administrators...

September 26, 2022
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20Sep

UK. Early pensions access could encourage people to save, says ACA

Younger generations could be encouraged to save more for the long-term if the state allowed them to dip into their retirement savings early in order to cover urgent essential expenditure. This is according to evidence submitted by the Association of Consulting Actuaries for a Treasury Select Committee inquiry examining whether the current suite of tax reliefs represent good value for money. The ACA said too many people currently do not have a cushion of adequate immediate-access savings that would cover unexpected...

September 20, 2022
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09Sep

Spending Elasticity and Optimal Portfolio Risk Levels

By David Blanchett, Jeremy Stempien Research on optimal retirement strategies overwhelmingly assumes that the retirement income goal is effectively inelastic (or fixed), which implies the retiree household has neither the desire nor the ability to cut back on spending for the entire duration of retirement (which is often assumed to last 30+ years). This is an incredibly unrealistic assumption that has significant implications on a myriad of retirement decisions. This piece focuses on how spending elasticity impacts optimal portfolio risk...

September 9, 2022
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08Sep

South Africa’s Eskom Recovers $1.7 Million From Ex-CEO’s Pension

South Africa’s state-owned power utility Eskom Holdings SOC Ltd. has recovered 30 million rand ($1.7 million) that it paid six years ago to boost the pension of former Chief Executive Officer Brian Molefe. The nation’s High Court in July reaffirmed a 2018 ruling that the payout to increase Molefe’s early-retirement benefit was unlawful, Eskom said in a statement on Twitter on Wednesday. Read also Ghana. Pensions industry loses US$800 million in 2 years to weakening cedi While the amount is unlikely to...

September 8, 2022
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08Sep

Departing Hong Kong residents took $269 mln from pensions in Q2

Residents leaving Hong Kong for good withdrew a total of HK$2.114 billion ($269.31 million) from their pension accounts in the second quarter of 2022, up 0.9% from a year earlier, government data showed on Wednesday, a sign that more people were moving put of the financial hub. Curbs to control the spread of COVID-19 are partly blamed for a net outflow of 113,200 people from Hong Kong between mid-2021 and mid-2022, according The city had a population of around 7.29 million...

September 8, 2022
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August 2022
22Aug

South Africa. One simple decision can cost you 41% of your retirement

On the back of the widely known statistic that over 90% of South Africans are not in a position to retire comfortably, FNB Employee Benefits has also noted a growing trend amongst SME employees not fully understanding or saving enough for retirement. “Although up to 70% of our commercial banking employers currently don’t offer formal benefits to their staff members, the small and medium businesses that do offer these benefits are concerned at the low rate of retirement saving from...

August 22, 2022
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08Aug

South Africa. Proposed new ‘two-pot’ will allow one withdrawal per year from savings

On 31 July, the South African government announced the proposal of a “two-pot” retirement system. The proposed system will allow people to save for non-retirement purposes (e.g. emergencies) via their retirement funds and access one third of their retirement savings when needed. You can withdraw money once a year, as long as there is money in the savings pot. "These amendments aim to encourage members to preserve their retirement savings by making it more flexible to accommodate unforeseen pressures that members face...

August 8, 2022
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