Excerpt:
Going through the text of the stimulus bill, section 9706 provides Single Employer plans with another tool to reduce contributions.
Author(s): John Bury
Publication Date: 16 March 2021
Publication Site: Burypensions
Category: Retirement
American Rescue Plan Act of 2021 (5) 9705
Excerpt:
Going through the text of the stimulus bill, section 9705 turns to funding relief for Single Employer plans by returning to the 15 year amortization schedule for minimum funding purposes for 2022 (with optional election for 2019, 2020, and 2021) as if draconian PBGC premiums were not enough in themselves to discourage underfunding.
Author(s): John Bury
Publication Date: 16 March 2021
Publication Site: Burypensions
Australia gets a $156 billion pension merger as new laws spur consolidation
Excerpt:
The mega-merger reflects the rapid consolidation of Australia’s A$3 trillion pension industry after a 2018 inquiry found fees charged by some managers were unjustified and eroded workers’ savings, and that many funds were not putting customers’ interests ahead of their own.
The government has since made it mandatory for funds to put member interests first, triggering a wave of mergers as fund boards determine that scaling up results in a better deal for people’s savings.
“The due diligence process we have undertaken demonstrates a strong business case for merging with achievable efficiencies and savings,” said QSuper Chair Don Luke and Sunsuper Chair Andrew Fraser in a statement.
Author(s): Reuters staff
Publication Date: 15 March 2021
Publication Site: Reuters
Australia Pensions Ink Deal to Create $155 Billion Fund
Link: https://finance.yahoo.com/news/australian-155-billion-pension-merger-222035563.html
Graphic:
Excerpt:
Two of Australia’s largest pension funds moved a step closer to creating a A$200 billion ($155 billion) giant as the world’s fourth-biggest pension pot consolidates.
QSuper and Sunsuper Pty. have signed a deal to merge, the two funds said in a joint statement Monday. The Brisbane-based funds will combine by September to create the country’s second-largest pension fund.
…..
QSuper has about A$120 billion in funds under administration and looks after the retirement savings for Queensland state government employees. Sunsuper has about A$80 billion in savings for employees of corporations including Unilever Plc and Virgin Australia.
Author(s): Matthew Burgess, Bloomberg
Publication Date: 14 March 2021
Publication Site: Yahoo Finance
Grim COVID-19 Scenario Could Cut Pension Liabilities
Link: https://www.thinkadvisor.com/2021/03/09/grim-covid-19-scenario-could-slash-pension-liabilities/
Excerpt:
The pandemic could also slash pension plan sponsors’ liabilities, by making ordinary health care an expensive luxury — and driving up the U.S. death rate for decades to come.
Analysts at Club Vita US LLC have presented those scenarios in a look at the possible effects of the COVID-19 pandemic on three types of U.S. pension plans: defined benefit plans sponsored by single employers; defined benefit plans sponsored by multiple private-sector employers; and defined benefit plans sponsored by government employers.
The analysts’ work reflects the same kinds of effects that might affect blocks of life insurance policies, blocks of annuities, and life settlement portfolios.
Author(s): Allison Bell
Publication Date: 9 March 2021
Publication Site: Think Advisor
Milliman analysis: Corporate pension funded ratio climbs to 92.9% in February
Excerpt:
Milliman, Inc., a premier global consulting and actuarial firm, today released the latest results of its latest Pension Funding Index (PFI), which analyzes the 100 largest U.S. corporate pension plans.
In February, corporate pension funding improved by $67 billion thanks to a 26-basis-point increase in the monthly discount rate, from January’s 2.62% to 2.88% as of February 28. As a result, the funded status deficit dropped to $133 billion at month’s end. Meanwhile, the market value of assets dropped by $2 billion for the month, the result of a meager 0.13% investment gain. Overall the funded ratio for the Milliman PFI plans climbed from 89.7% at the end of January to 92.9% as of February 28, the fifth straight month of improved funding for these plans.
Author(s): Milliman
Publication Date: 8 March 2021
Publication Site: PRNewswire
The hopeful news for Social Security buried in the $1.9 trillion bailout
Excerpt:
Lawmakers have moved to include in the bill an unrelated $86 billion bailout for bankrupt union pension plans.
And once they’ve done that, it’s going to be even harder for them to argue that they shouldn’t bail out the stricken Social Security trust fund that is actually their responsibility. Social Security’s deficit: $16.8 trillion, or about $50,000 for every person in America.
On the other hand, if Congress tries to weasel out of fully funding Social Security in a few years’ time, this rescue of private sector union pensions is going to look like an outrage.
Author(s): Brett Arends
Publication Date: 6 March 2021
Publication Site: MSN Money
Dow to freeze U.S. pension plans, contribute $1 billion and hike DC match
Excerpt:
Dow Inc., Midland, Mich., will freeze the benefit accruals of its U.S. pension plans at the end of 2023, increase its matching contribution in its defined contribution plans and will contribute $1 billion to the pension plans before the end of the first quarter.
The chemical company announced its plans in an 8-K filing with the SEC on Thursday.
First, Dow will freeze benefit accruals for participants in qualified and non-qualified pension plans, including the Dow Employees’ Pension Plan, the Union Carbide Employees’ Pension Plan and the Dow Chemical Co. Executives’ Supplemental Retirement Plan-Supplemental Benefit, effective Dec. 31, 2023.
Author(s): Rob Kozlowski
Publication Date: 4 March 2021
Publication Site: Pensions & Investments
Can States Be Trusted To Manage Retirement Savings? Two New Reasons For Concern
Excerpt:
Readers, I have long been of the opinion that it’s a sensible approach to enable savers to choose among multiple retirement funds, so that they are able to reflect their particular ethical concerns, whether this means an “ESG” (environmental, social, and governance-issue focused) fund or a religious-screening approach, such as excluding companies which donate to Planned Parenthood (Ave Maria Funds) or which are in the alcohol industry (GuideStone Funds).
But no state official should be using investors’ money to play politics — not the money of individual investors through state-run IRAs or the retirement savings accounts of state employees, and not the money of public pension funds. And, frankly, I find it appalling that these sorts of actions aren’t universally considered to be wholly out of bounds — but I suppose living in Illinois (newly-declared the third-most-corrupt state, with Chicago as the most-corrupt city), I suppose I should lower my expectations. Readers in the remaining 49 states, however, should watch carefully.
Author(s): Elizabeth Bauer
Publication Date: 28 February 2021
Publication Site: Forbes
China says working on plan to raise retirement age
Link: http://global.chinadaily.com.cn/a/202102/26/WS6038c7efa31024ad0baab6c7.html
Excerpt:
You said raising the retirement age in a gradual manner is a major decision made upon China’s overall economic and social development, which will improve the use of China’s human resources, enhance the sustainability of the social insurance system and ensure basic living of the people.
Currently, in China, the retirement age for men is 60, while for women it is 55 for white-collar workers and 50 for blue-collar employees.
With great social and economic progress taking place in China, the retirement age, which was set in the 1950s, is relatively low, according to You, who cited longer average life expectancy as well as changes in demographic structure and the supply and demand of labor.
Publication Date: 26 February 2021
Publication Site: China Daily
Stalin Sees Poll Motive In TN CM Raising Retirement Age; Mum On DMK-Congress Seat-sharing
Excerpt:
DMK president MK Stalin on Thursday hit out at Tamil Nadu Chief Minister K Palaniswami for raising the retirement age of government employees to 60 years, saying the announcement was made with an eye on the forthcoming assembly elections in the state. Though increasing the retirement age of state government employees was welcome, it appears that the announcement was made with the elections in mind, Stalin alleged.
….
“Raising the retirement age is welcome, albeit the announcement made for the election,” the DMK leader said in a Facebook post on Thursday. He said the Chief Minister should have fixed the age criteria of 60 years when he had increased the retirement age to 59 from 58 years in May last year.
Publication Date: 26 February 2021
Publication Site: RepublicWorld.com
Raising of retirement age flayed
Excerpt:
The upward revision of retirement age for State government employees will affect opportunities for younger generation in getting employment in government departments, said K. Balakrishnan, state secretary, CPI (M) on Thursday.
Addressing journalists in Thanjavur, he said the State government, which was struggling to settle the retirement benefits of the State Transport Corporation employees, had announced that the retirement age for government employees would be increased to 60 years. This was nothing but an attempt to evade its responsibility of shouldering the financial burden of settling the retirement benefits of those due to retire from government service during this year.
Publication Date: 25 February 2021
Publication Site: The Hindu