Category: Retirement

To Protect Australian Workers’ Retirement Savings, We Must Democratize Pensions

Mary Pat Campbell

Link: https://jacobinmag.com/2021/05/australia-pensions-superannuation-super-industry-funds-democratic-control-investment-vanguard-equity-stock-market

Excerpt:

By design, Australia’s existing superannuation system reproduces inequalities built into the labor market. This is because employers must pay super as a proportion of wages into individual accounts that then earn compounding returns. Upon retirement, high-income workers may find they own a significant pool of capital.

Meanwhile, lower-income workers — disproportionately women — retire with the lowest super balances. The same will be true of younger or marginalized workers who are trapped in precarious or informal employment. As wages continue to decline and precarious work becomes more prevalent, the number of people with a stake in defending superannuation is shrinking year by year.

To make matters worse, in its present form, superannuation undermines genuinely redistributive institutions like the age pension. This is because conservative political forces are able to present them as a last-resort safety net rather than a guarantee of the right to a decent retirement.

Author(s): Robert Lechte

Publication Date: 9 May 2021

Publication Site: Jacobin Magazine

Third withdrawal of 10: How will the mechanism for pensioners for annuities work?

Mary Pat Campbell

Link: https://www.t13.cl/noticia/negocios/rentas-vitalicias-como-funcionara-retiro-dineros-como-solicitar-afp-tercer-retir-10-28-04-21

[auto-translated by Google]

[this relates to people in Chile being allowed to taking fairly large withdrawals from their official retirement savings]

Excerpt:

This Monday, the application process will begin through digital platforms within the framework of the new 10% third withdrawal law.

As detailed by the Undersecretary of Social Welfare, Pedro Pizarro, the process will begin 100% online during the first two weeks of May, both for AFP users and for the nearly 700 thousand pensioners through the life annuity modality , who for the first time may request a cash advance.

In view of this process, the Financial Market Commission is preparing an instruction manual to regulate the unprecedented withdrawal of savings in the form of life annuities, which – they assure – will be published shortly (In this same note we will update the news of said instruction )

Publication Date: 2 May 2021

Publication Site: T13 in Chile

Chile’s Pinera counters opposition pensions withdrawal bill with own initiative

Mary Pat Campbell

Link: https://www.nasdaq.com/articles/chiles-pinera-counters-opposition-pensions-withdrawal-bill-with-own-initiative-2021-04-25

Excerpt:

Chilean President Sebastian Pinera on Sunday announced the government will launch its own bill to allow citizens to draw more from their private pensions in a last-ditch attempt to kill off a similar move led by the opposition.

Pinera said his proposed rival bill would be subject to means-tested taxation and would allow for the withdrawn funds to be gradually repaid through state and employer contributions.

The president said his initiative was a better option than the opposition’s bill, which the government says would leave millions of future pensioners with little to no savings.

Author(s): Aislinn Laing

Publication Date: 25 April 2021

Publication Site: NASDAQ

UNITE HERE Launches Website for Beneficiaries of Pension Plans Taken Over by Athene

Mary Pat Campbell

Link: https://www.businesswire.com/news/home/20210503005554/en/UNITE-HERE-Launches-Website-for-Beneficiaries-of-Pension-Plans-Taken-Over-by-Athene

Excerpt:

As Athene takes control of pension plan assets, it seeks to profit by earning more from investment returns than it is required to pay out to recipients. Athene uses Bermuda-based reinsurance subsidiaries to reinsure most deposits. Apollo manages most of Athene’s assets in exchange for fees. Apollo invests some of Athene’s assets in loans and structured debt products originated or securitized by Apollo affiliates.

Apollo Global Management created Athene in 2009 and has managed its assets since its inception. On March 8, Apollo announced its plan to acquire and merge with Athene.

UNITE HERE’s new website will provide information and resources to the beneficiaries of plans taken over by Athene. It includes facts about the recent JCPenney transaction, links to reporting on Athene’s investment practices, and contact information for relevant regulatory agencies. Beneficiaries can use the site to sign up for updates.

Publication Date: 3 May 2021

Publication Site: Businesswire

Here’s the average net worth of Americans ages 65 to 74

Mary Pat Campbell

Link: https://www.cnbc.com/select/average-net-worth-of-americans-ages-65-to-74/

Graphic:

Excerpt:

According to the Fed data, the median net worth for Americans in their late 60s and early 70s is $266,400. The average (or mean) net worth for this age bracket is $1,217,700, but since averages tend to skew higher due to high net worth households, the median is a much more representational amount.

While $266,400 may seem like a lot of money at first, people in their 60s usually start tapping into their net worth to cover living expenses in retirement. When planning for your non-working years, it’s important to understand how net worth works and how it relates to living on a fixed income.

Here’s a look at the average and median net worth by age in the U.S., according to the Fed. As you can see, net worth tends to peak for most American during the decade after age 65.

Author(s): Megan DeMatteo

Publication Date: 4 May 2021

Publication Site: CNBC

Your Pension Board Thinks It’s Smarter Than Warren Buffett—It’s Not

Mary Pat Campbell

Link: https://www.forbes.com/sites/edwardsiedle/2021/05/01/your-pension-board-thinks-its-smarter-than-warren-buffett-its-not/?sh=b3fdc2611302

Excerpt:

Buffett has a consistent history of blasting Wall Street firms for charging high fees for actively managed investments and has recommended pensions invest in low-cost passively managed index funds.

You might think that underfunded pensions struggling to pay benefits would heed Buffett’s advice and seek to cut the fees they pay Wall Street.

Embrace austerity. Tighten their belts. Trim the fat. 

In fact, every forensic investigation I’ve ever undertaken has exposed that the nearer a pension is to insolvency, the higher the fees and the greater the risks the pension takes on.

Author(s): Ted Siedle

Publication Date: 1 May 2021

Publication Site: Forbes

About That Pension Check… A Miscalculation Case With Broader Implications

Mary Pat Campbell

Link: https://www.natlawreview.com/article/about-pension-check-miscalculation-case-broader-implications

Excerpt:

The Ninth Circuit Court of Appeals recently addressed several issues of first impression in Bafford v. Northrop Grumman (9th Cir. April 15, 2021), a lawsuit involving retirees who received vastly overstated pension benefit estimates from the plan’s recordkeeper reminds employers of the importance of careful administration.   The case highlights the need to ensure that electronic recordkeeping systems and tools align with the plan terms.  Participant requests for plan or benefit information using online portals or other electronic means still demand timely and accurate responses as required by ERISA’s disclosure requirements.

…..

On appeal from the district court, the Ninth Circuit agreed that the participants’ ERISA fiduciary claims should have been dismissed, aligning with the First and the Fourth Circuit’s view that a named fiduciary is only liable for a fiduciary breach if they are performing a fiduciary function.  The court said that calculating pension benefits using a pre-set formula is a ministerial function, not a fiduciary function.  So a miscalculation error would not create a breach of fiduciary duty claim.

Author(s): Craig A. Day, Suzanne G. Odom

Publication Date: 25 April 2021

Publication Site: The National Law Review

The Gender Pensions Gap

Mary Pat Campbell

Link: https://www.actuarialpost.co.uk/article/the-gender-pensions-gap-19479.htm

Excerpt:

 The difference between the mean retirement income of men and women aged 65 and over currently stands at an average of 26% across OECD countries, however in the United Kingdom it is even higher than that at somewhere between 34% and 43%.

 There are many reasons for this gap, both economic and societal, and the report gamely provides an analysis of them all. Ultimately however, the greatest impact is down to the differences in work patterns between male and female employees. Women in the OECD have on average a career which is a third shorter than that of men and are much more likely to be working part time. On top of this they are paid less for the work they do, with the gender pay gap standing at 13%, a difference that, unsurprisingly, starts to appear between the ages of 24 and 35 when women are most likely to take a career break in order to raise a family.

 Third tier pension contributions are strongly correlated with earnings and so women tend to save lower amounts and for less time.

Author(s): Fiona Tait

Publication Date: 19 April 2021

Publication Site: Actuarial Post (UK)

All eyes on Chile´s Pinera as congress approves a fresh pensions drawdown

Mary Pat Campbell

Link: https://www.reuters.com/world/americas/all-eyes-chiles-pinera-congress-approves-fresh-pensions-drawdown-2021-04-23/

Excerpt:

Chile´s Congress on Friday approved by a large majority a move to allow citizens to withdraw a third tranche of their privately held pensions to assuage economic hardship wrought by the coronavirus pandemic.

Lawmakers in the country´s lower house approved the measure with 119 to 17, with 3 abstentions, prompting cheering and applause. Senators greenlighted the move earlier this week.

Previously, Congress approved two withdrawals of 10% from pension pots in July and December, with the help of members of President Sebastian Pinera’s Chile Vamos coalition who defied instructions to vote the initiatives down.

Author(s): Aislinn Laing

Publication Date: 23 April 2021

Publication Site: Reuters

Continuing COVID hangover would see pension liabilities drop

Mary Pat Campbell

Link: https://www.actuarialpost.co.uk/article/continuing-covid-hangover-would-see-pension-liabilities-drop-19483.htm

Excerpt:

Only in the event of a tragic Covid-19 scenario, seeing continued substantial additional deaths for many years would there be a significant reduction in UK DB scheme liabilities, according to a new report from LCP.


While LCP believes that the financial impact on DB schemes of direct deaths from the first two Covid-19 waves is likely to be marginal, it outlines several other scenarios around the pandemic’s longer-term impact on mortality rates and scheme labilities. The range of outcomes illustrates the challenges of choosing an appropriate mortality assumption at the current time, with much uncertainty over how Covid-19 will play out.

Author(s): Chris Tavener

Date Accessed: 20 April 2021

Publication Site: Actuarial Post (UK)

Ukraine raises retirement age for women to 60 years old

Mary Pat Campbell

Link: http://www.xinhuanet.com/english/europe/2021-04/02/c_139854924.htm

Excerpt:

The Ukrainian government has raised the age of retirement for women to 60 years old since April 1 this year.

The change was due to the law on raising the retirement age for women from 55 to 60 years old, which was passed by the Ukrainian Parliament in 2011.

Now in Ukraine men and women retire at the same age.

The Ukrainian authorities explained that the increase in the retirement age for women was to mitigate the negative consequences of the aging population, and reduce the deficit of the Pension Fund of Ukraine, which at the end of 2020 reached 13.2 billion hryvnia (474.5 million U.S. dollars).

Publication Date: 2 April 2021

Publication Site: Xinhua

The Average Retirement Age in Every State

Mary Pat Campbell

Link: https://finance.yahoo.com/news/average-retirement-age-every-state-150000450.html

Excerpt:

Retiring early seems to be on everyone’s minds these days. The growing popularity of the so-called FIRE movement — short for financial independence, retire early — is a testament to how much everyone seems to be craving a slice of “the easy life.” The good news is that in many U.S. states, what most people would call an “early” retirement is within reach. Although “full retirement age” for Social Security purposes isn’t until age 67, the average retirement age in every single state — with the exception of the District of Columbia — is below 67. On average, retirees in the U.S. hang up their work boots at age 64, according to Money Talks News.

Of course, to truly live a comfortable retirement takes more than desire — it also takes a large chunk of cash.

If nothing else, this study proves two things. First, the state in which you live can play a big role in how early you can retire, as evidenced by the low average retirement ages across wide swaths of the South and Midwest. Next, it takes more than $1 million to have a comfortable retirement in any state in America — or over $2 million in the case of Hawaii and the District of Columbia — so it’s important to work with a retirement advisor or the best 401(k) providers to help boost your savings as much as possible.

Author(s): John Csiszar

Publication Date: 11 March 2021

Publication Site: Yahoo Finance