Letters From... – Page 12

  • Analysis

    Battle to stave off crisis

    May 2011 (Magazine)

    Andrew Cuomo is one of the most admired recently-elected state governors – primarily for his efforts to get the budget under control and bring taxes down.

  • Analysis

    Meet Ms Active Ageing

    April 2011 (Magazine)

    Pension funds will observe with interest the European Commission’s announcement goal of the European Innovation Partnership on Active and Healthy Ageing. This is to add two years to the average EU healthy lifespan by 2020. However, achieving healthy, longer lives is not quite as straightforward as it seems.

  • Analysis

    State debate hots up

    April 2011 (Magazine)

    The debate about US public employees’ pension benefits is hotting up, and the results will have a great impact on the pension fund industry. For the first time there is a discussion about the real costs of promises made by politicians to public sector employees and the bill to tax payers. In fact, the whole matter is extremely political, as one can see from the very different approaches of two neighbouring states, Wisconsin and Illinois.

  • Analysis

    Muni transparency

    March 2011 (Magazine)

    US lawmakers, investors and the Securities and Exchange Commission (SEC) are asking state and local administrations for more transparency about their pension liabilities. All are concerned that these liabilities are increasing the risk level of the $2.9trn (€2.1trn) of municipal bonds issued to balance local public budgets.

  • Analysis

    MEPS rush green paper follow-up

    March 2011 (Magazine)

    Substantial indications of the direction Brussels is likely to take on pension policy are emerging surprisingly early as a follow-up to the Commission’s policy paper of last July.

  • Analysis

    Language barriers

    February 2011 (Magazine)

    Pensions terminology is a confusing mishmash and needs to be simplified. It is causing problems not just for legislators but for all those who are pushing towards comparability in the finance and pensions industries.

  • Analysis

    Hard target

    February 2011 (Magazine)

    Are target-date funds (TDFs) serving the needs of their participants? To answer this question, JP Morgan Asset Management carried out research comparing participants’ behaviour with the common industry assumptions that inform TDF design. The conclusion is that the latter should be more conservative than experts might think.

  • Analysis

    Deficits in focus

    January 2011 (Magazine)

    The EU has now made a significant concession to accommodate the demands made by eight CEE member states and Sweden in August last year for the incorporation of future pension funding shortfalls into national annual budget statistics. Their governments claimed current rules effectively punish them for having made reforms to their pension systems that involved channelling some contributions away from the state system and into private funds.

  • Analysis

    Public vote for change

    December 2010 (Magazine)

    The Republic victory at the November elections has huge implications for public pension funds. The results are, in fact, supportive of reform to retirement systems that are threatening to bankrupt several state and local administrations. A few newly elected governors advocate moving towards a hybrid pension model where at least ...

  • Analysis

    A private equity rethink

    November 2010 (Magazine)

    At the end of a tumultuous decade, US public pension funds are re-evaluating their relationship with private equity firms. Disappointing returns, high fees and a number of scandals are pushing pension fund managers either to quit investing in this asset class or to take more control themselves. But no solution ...

  • Analysis

    EIOPA: Mixed feelings

    November 2010 (Magazine)

    The new European Insurance and Occupational Pensions Authority (EIOPA) opens its doors in 2011 with the prospect of greatly increased powers and a fivefold increase in staff in due course. EIOPA replaces the existing Committee of European Insurance and Occupational Pension (CEIOPS), which is one of the three ‘level three’ ...

  • Analysis

    Social reform tensions

    October 2010 (Magazine)

    The campaign for the November mid-term Congressional elections is heating up, and one topic raising temperatures is social security reform. Depending on the outcome of the elections in the House and the Senate, the recommendations of the National Commission on Fiscal Responsibility and Reform (NCFRR), due by 1 December, will be received in a different political environment.

  • Analysis

    IAS19 volatility danger

    October 2010 (Magazine)

    Perhaps unsurprisingly, pension fund representative bodies have registered their objection to the International Accounting Standards Board’s (IASB) fair value proposals for defined benefit (DB) pension accounting. There is also backing from two major US organisations and a European one, plus general support by a second European body.

  • Analysis

    Getting its Act together

    September 2010 (Magazine)

    US pension funds won two important battles in the debate that led to the approval of the Dodd-Frank Wall Street Reform Act in July. One is concern over the use of swaps to hedge plan risks, and the other is with stable value funds. The Act is also so complex that institutional investors are still waiting to see how it will affect them. It runs to more than 2,300 pages and its full impact might not be felt for years: according to conservative estimates, regulators have been conducting nearly 100 studies and writing more than 350 new rules implementing the changes.

  • Analysis

    The Commission hides its teeth

    September 2010 (Magazine)

    The authors of the European Commission’s policy paper, ‘Towards Adequate, Sustainable and Safe European Pension Systems’, are clearly aware that solving Europe’s pension challenge is a formidable task. Not only are there the oft-cited demographic problems and injustices to workers who move across national boundaries, but there is also the fragmented nature of member states’ legislative frameworks to consider.

  • Analysis

    Cash Balance

    July 2010 (Magazine)

    Coca-Cola is the latest big US company to convert its final salary pension plan to cash balance, thereby becoming part of a trend highlighted in a recent survey of the Fortune 100 companies by professional services firm Towers Watson. Of these companies, the number replacing their traditional defined benefit (DB) plans with account-based retirement plans for new employees continues to increase.

  • Analysis

    Derivatives

    July 2010 (Magazine)

    Proposals for legislative measures on uncovered, or naked, short selling of securities and the trade in derivatives – two crucial areas in the EU’s wholesale upgrade of financial legislation post-financial crisis – are open to response from interested parties until 10 July.

  • Analysis

    Ratings war

    June 2010 (Magazine)

    Two new developments in the recent rating agency drama could radically change the way pension funds manage their bond portfolios. One is the a court decision allowing the California Public Employees’ Retirement System (CalPERS), the largest state pension fund in the US, to go ahead with a lawsuit against Moody’s, S&P and Fitch, which it claims caused it to lose about $1bn (€809m) because of inaccurate ratings. The other development is the US Senate’s approval of an amendment to the financial reform proposed by Florida Republican George LeMieux and Washington Democrat Maria Cantwell to remove references to the raters from the laws governing securities and banking.

  • Analysis

    Worse than it looks

    June 2010 (Magazine)

    The forthcoming loss of Jörgen Holmquist, director general, and David Wright, deputy director-general, two of the most senior and experienced officials from the European Commission’s division responsible for legislation for the banking, insurance, free movement of capital, pensions and capital reserves sectors is bad enough. But accusations that there is a shortage of personnel preparing a “crazy number of legislative initiatives” make the losses worse in this time of crisis.

  • Analysis

    The state we are in

    May 2010 (Magazine)

    In the US, most defined benefit (DB) pension schemes are public and their members are employees of states, municipalities and other local administrations. Their future to a great extent depends on their members’ unions: if the unions refuse to accept radical reforms in order to reduce the growing fund deficits, the current funding crisis will become explosive, say two new reports by independent research institutes. The budget season and the November elections are helping to draw attention to this vital issue.