All Letter from the US articles
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Opinion PiecesActive management is back on the menu for US pensions
Rising rates and market volatility are forcing US pension funds to rethink their approach to passive and active investing. They are realising that their US stock portfolios are not diversified enough to help protect against a correction. But change may not come so fast.
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Opinion PiecesSEC cracks down on private equity and hedge funds
Pension funds, university endowments, insurance funds, and other institutional investors have long called for more transparency about their investments in private equity and hedge funds.
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Opinion PiecesUS pension funds hone in on private credit
Private credit has been one of the fastest growing asset classes in the institutional world over the past several years, according to Catherine Beard, senior vice-president in consultancy Callan’s alternatives group.
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Opinion PiecesESG remains mired in politics in the US
“I am not going to use the word ESG because it’s been misused by the far left and the far right,” said BlackRock CEO Larry Fink in a conversation at the Aspen Ideas Festival in June.
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Opinion PiecesLetter from US: Annuities move into the US market
Three of the largest players in the US pension industry are launching new products that offer annuities as a retirement savings distribution option. Millions of Americans will soon have access to pension-like investments in their 401(k) plans thanks to BlackRock, Fidelity Investments, and State Street Global Advisors. The other large player in the US market, Vanguard, will not take part in this new trend.
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Opinion PiecesUS: state enrolment systems gain traction
There are signs that the US state-facilitated retirement savings plans are starting to have a positive impact on both the creation and uptake of private pension plans.
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Opinion PiecesUS: Politics drive ESG debate
Three Republican candidates for the White House are vocal advocates against pension funds adopting environmental, social and governance (ESG) investment practices.
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Opinion PiecesUS: Private equity losses weigh on pension funds
US public pension funds should brace for a big negative surprise when they prepare their reports for the fiscal year ending 30 June 2023. Only then will their returns reflect losses from 2022 in their private equity (PE) portfolios.
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Opinion PiecesUS: Sponsors back pension buyouts
In 2022, pension risk transfer (PRT) deals in the US reached a record of over $50bn (€46.5bn), according to estimates. And many industry observers expect demand from plan sponsors for PRT solutions to remain strong in 2023.
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Opinion PiecesUS: Republican House will not divert from SECURE 2.0
The new Republican majority in the US House of Representatives is not large enough to have a significant impact on the retirement industry.
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Opinion PiecesUS: Pension plans face up to a tough 2022
After the terrible returns of the fiscal year that ended in June, what will US public pension funds do? Will they increase their risky investments to try to reach their target returns? Or will they lower their target returns?
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Opinion PiecesUS: Transparency concerns over SEC private market disclosure rules
Will the US Securities and Exchange Commission’s (SEC’s) new climate risk reporting rules bring more transparency to private markets? Or will they have the unintended consequences of increasing the opacity of the markets?
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Opinion PiecesUS: The great unfreeze - does it make sense to reopen DB plans?
US defined benefit (DB) public and corporate pension funds are responding differently to inflationary pressures. Public schemes are more concerned about the negative impact of financial market turmoil on their returns, while corporates are enjoying the rising discount rates that are lowering their liabilities and improving their funded status.
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Opinion PiecesUS: A cautious approach on private assets in DC plans
Will 2022 be the year when private equity is finally incorporated in US defined contribution (DC) plan line-ups? Possibly, following the Department of Labor’s (DoL’s) clarification of its position in a letter last December. But it will be a very slow process, according to industry experts.
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Opinion PiecesUS: Fidelity’s retirement account crypto move raises concerns
Even six months ago it looked like crypto investing was not going to become mainstream any time soon in 401(k) plans – and since then Bitcoin has halved in value. But the market’s sentiment and trend are changing very quickly. So much so that Fidelity Investments has now become the first major retirement-plan provider to allow investors to add a Bitcoin account to their 401(k). The move was announced in late April.
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Opinion PiecesUS: The SEC’s new climate disclosure rule is a watershed
Most investors, asset managers and consultants look like they are in favour.
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Opinion PiecesLetter from US: US pension funds decide on Russian holdings
“We support efforts at all levels of government and across the public and private sectors, which include cross-functional and multi-agency partnerships, to divest State Treasury and pension funds from investments in Russian-domiciled companies. We are committed to taking steps that include divesting as soon as possible to have the quickest and most meaningful impact on this tragic situation.”
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Opinion PiecesLetter from US: ESG faces backlash in some US states over fossil fuels
Is there a backlash against the environmental, social, and governance (ESG) investing movement?
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Opinion PiecesLetter from US: Upcoming court ruling could create complications for DC plan sponsors
By the first half of this year, the United States Supreme Court is expected to issue a decision that could affect the defined-contribution (DC) industry. The case is Hughes vs Northwestern University, one of about 150 similar class-action lawsuits filed nationally in the past few years, alleging that plan fiduciaries breached their duty of prudence under ERISA, the Employee Retirement Income Security Act of 1974.
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Opinion PiecesLetter from US: Liquidity tops the agenda for US pension plans
Monitoring and managing liquidity will be a major issue for many US pension funds in 2022. The risk of a liquidity crunch affects public systems above all, but corporate plans are not immune.
