Analysis and opinion – Page 4
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Opinion PiecesImprovement required
Climate change will continue to be one of the most economically impactful events as it affects us all. It requires immediate and ambitious action to prevent the worst effects on people and biodiversity and it signals a message that nations need to build a more resilient and sustainable global financial system.
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Features
Is sustainability mispriced?
Living in the developed world over the past 50 years, life has been stable, even idyllic, for most people. That is certainly compared with their grandparents and previous generations who lived through two world wars and the Spanish flu. But, as COVID-19 has shown so cruelly, there are existential dangers that can lie hidden. These can rip the established world order asunder if not tackled beforehand.
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Features
Accounting Matters: Accounting for the Wedge
The reason why defined benefit (DB) scheme sponsors account for inflation is because International Accounting Standard 19, Employee Benefits, tells them that if they make a benefit promise that is linked to price increases, the effect of that commitment has to be accounted for. The starting point for what by any standards is a gargantuan actuarial task is to look at yields on inflation-linked bonds.
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Features
Biden signal is green for ESG
For many, US president-elect Joe Biden spells hope. From an ESG-perspective, there are two main aspects to this phenomenon.
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Opinion Pieces
The looming trust deficit
Once again, European pension systems – notably those of the Netherlands and Denmark – have scored most highly in this year’s Mercer CFA Pension Index. These successes are no accident, and among the key ingredients is years of pragmatic and consensual policy making.
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Opinion Pieces
COVID is not everything
For understandable reasons it has become commonplace to talk about the immense damage done by COVID-19. This probably makes sense as a kind of shorthand. However, careful reflection on the painful experience of recent months should show it is a one-sided way of understanding the pandemic’s devastating impact.
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Opinion Pieces
Talking to strangers
In his recent book, Malcolm Gladwell discusses how people’s natural lack of ability to detect lies can lead to unpleasant consequences.
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Opinion Pieces
Can superfunds be the silver bullet for DB woes?
Consolidation as a means of achieving better outcomes for pension schemes is a growing trend. This was highlighted in the UK’s Department for Work and Pensions’ (DWP) 2018 White Paper on protecting defined benefit (DB) pension schemes.
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Features
Smart phones: the key to African opportunity
Demographics are often the least appreciated of the long-term trends that investors consider, despite being perhaps the most important.
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Features
Accounting Matters: Who sets the standards?
You are what you know, the saying goes. And it goes without saying that the 211 comment letters the International Accounting Standards Board (IASB) received on its Primary Financial Statements (PFS) project will represent some diverse viewpoints.
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Opinion Pieces
Nasty problems can be overcome
The Nobel laureate Bill Sharpe once called defined contribution (DC) decumulation the “nastiest, hardest problem in finance”.
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Opinion Pieces
Mind the reality gap
The past few months have brought huge discrepancies between the financial markets and the economy.
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Opinion Pieces
Pension funds should reflect on their true purpose
With COVID-19 infection rates rising across Europe it seems clear that lockdowns are not over yet. Europe will suffer economically as well as socially and politically.
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Opinion Pieces
No need to panic
The global economic discussion has focused on assessing what damage COVID-19-related lockdowns have caused, and more recently on questioning the speed and strength of the recovery.
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Features
Sharing Economy: Think impact, build a legacy
As the world adjusts to COVID-19, amid the uncertainties and dangers that lie ahead, there should still be time to dream of a better world.
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Features
Accounting Matters - UK DB pension schemes: One step forward, two steps back
As sometimes happens with Easter, one of the surveys of the UK pensions accounting landscape from consultants Lane Clark & Peacock (LCP) was later than usual. And, like an Easter egg, this keenly awaited overview of the net funding position of FTSE 100 defined benefit (DB) pension schemes comes in two halves.
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Opinion Pieces
Making a difference
“This time is different”. Such claims were rightly skewered in a well-known book by Carmen Reinhart and Kenneth Rogoff. But with the benefit of recent experience it should be clear that their argument did not go far enough.
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Opinion Pieces
A long sunset on a fragile model
The ECB’s move in September 2019 to lower rates and restart corporate bond purchases was a clear red warning signal to defined benefit pension funds and other liability-driven investors.
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Opinion Pieces
The post-pandemic economy could be more of the same
There seems to be a consensus that COVID-19 will bring momentous change to the global economic order. Commentators point to several developments to support this idea.
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Opinion Pieces
Take from the young to give to the old
For many years, the Dutch pension system was considered one of the world’s best – it was top in class with Denmark in the Melbourne Mercer Global Pension Index annual study last year.
