Pensions and Insurance Update: Nov 2021

DB Pensions, DC Pensions, and Insurance Asset Management

Are global pension managers adequately allocating to Asian debt markets? How can DB pensions manage and minimise funded status volatility? How have capital market returns over the past year impacted pension plans throughout the world? What are scaled retirement advisory firms?

Here we have included recent papers which attempt to answer these questions and others on the global pension and insurance markets.

Discern and Diversify: Asian bonds (Eastspring Investments, 2021)

How do institutional investors and asset owners view the Asian fixed income market and to what extent are they allocating to this asset class? Eastspring Investments surveyed around 200 institutional investors on the subject.  

Like it or Lump it: Retiree attitudes to tax-free cash (LGIM, 2021)

For compliance reasons, this paper is NOT accessible in the United States and Canada

In 2015, the Freedom and Choice reforms allowed UK retirement savers to receive tax-free distributions. In this paper, LGIM examines this policy, how it is being utilised, and whether attitudes towards pensions have changed as a result.

Strategic Asset Allocation for a Default Pension Plan (Amundi, 2021)

For compliance reasons, this paper is NOT accessible in the United States

Amundi discusses the possibility of customising the default option for defined contribution pensions around members' exposure to real estate, social security benefits, and other factors.

Evolution of Derisking: Liability-hedging ideas (Wellington Management, 2021)

Wellington Management provides some ideas for DB pension managers on seeking to minimise funded status volatility via dynamic or static liability benchmarks and specific fixed income recommendations for additional yield.

Shifting DC Times Fall 2021 (Invesco U.S.)

For compliance reasons, this paper is only accessible in the United States

Invesco's bi-annual magazine contains four articles on defined contribution pensions. This edition covers the topics of EM equity allocations, emergency savings accounts, engaging with retirement account participants, and cyber risks.

The Impact of ESG Ratings on Total Shareholder Return (EY, 2021)

EY provides an update for insurance companies on how ESG ratings can impact TSR (total shareholder return), from inclusion in ESG indices and funds to ESG narratives and specific metrics to track.

Small Steps to a Better Future (Invesco, 2021)

For compliance reasons, this paper is only accessible in the United Kingdom

To what extent do pension savings rates boil down to a framing and communication issue for mid-working life individuals? Invesco investigates how impactful these small steps can be towards improving retirement incomes.

Global Pension Finance Watch: Q3 2021 (Willis Towers Watson)

Willis Towers Watson reviews the effects of capital market performance on DB pension plans in major retirement markets worldwide. Despite slightly negative returns in the U.S. in Q3, the past 12 months have been very positive for the North American and Eurozone markets.

Scaled Retirement Advisory Firms: Future of the aggregators (SEI, 2021)

SEI describes the lay of the land in the retirement advisory market and the emergence of SRAFs (scaled retirement advisory firms).

U.S. Pension Trends in an Era of Accelerating Volatility (Equable, 2021)

Conditions of state retirement systems in the U.S. have improved significantly from the previous year due to strong investment returns. However, pension costs and other funding issues remain present for many state and local governments.

UK Pensions De-risking Report: Buy-ins, buy-outs & longevity swaps (LCP, 2021)

For compliance reasons, this paper is only accessible in the United Kingdom

LCP projects that volumes of buy-in/buy-outs and longevity swap transactions could total as much as £650 billion in the coming decade.