All Letter from the US articles
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Opinion PiecesUS pension plans wrestle with China private market exposure
After a horrible 2023, Chinese stocks look cheap and attractive. But most US pension funds do not seem interested in investing in the Chinese stock market. On the contrary, they have reduced their holdings since 2020 and some are exiting entirely, according to Bloomberg analysis.
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Opinion PiecesUnder the spotlight: US pension plans and their use of leverage
Does US public pension funds’ use of borrowed money and derivatives pose systemic risks to global financial markets? That is the concern of global regulators, which have recently stepped up scrutiny of the practice, according to a recent article in the Financial Times (FT). But senior executives interviewed by IPE seem less worried.
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Opinion PiecesGuaranteed retirement income and AI: key themes for the US in 2024
The three major 2024 trends in the US retirement industry, according to senior industry figures interviewed by IPE, are: Plan sponsors will continue to expand financial wellness programmes and explore optional provisions of the new pension law SECURE 2.0. Plan participants will up their demand for guaranteed income and ...
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Opinion PiecesIBM revives defined benefit pensions in the US
This January 2024 marks an important turning point in the US retirement industry. Technology giant IBM, which has always been seen as a bellwether of American business practices, is keeping its 401(k) plan, but will stop matching contributions of up to 6%.
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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.
