More comment – Page 76
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Opinion Pieces
Target date woe
Target date funds (TDF) are still the fastest growing investment option in US 401(k) plans. They have survived the recent hearings held jointly by the Securities Exchange Commission (SEC) and the Department of Labor (DOL), and the industry’s fear that they were going to be constricted by new heavy rules has waned. But investment companies and plan sponsors must better explain TDF risks to workers if they want to grow further.
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Opinion Pieces
A golden age
“Dealing with the impact of an ageing population in the EU,” a communication from the European Commission, kicks off with the joyful view that: “For the first time in history, the vast majority of Europe’s citizens are able to lead active, healthy and participative lives well into old age.”
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Opinion Pieces
Solvency II
The European Commission called representatives of the European pensions and insurance industry and member state officials to a public hearing in May to thrash out a harmonisation of solvency rules for cross-border company pension schemes (IORPs). But most attendees were not receptive.
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Opinion PiecesGuest Viewpoint
“The real goal of risk management is to give decision makers a more intimate understanding of their portfolio”
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Opinion Pieces
PBGC woes
What a difference nine months can make. At the end of last September, the Pension Benefit Guaranty Corporation (PBGC) closed its fiscal year with a deficit of ‘only’ $11bn (€7.9bn) and its director Charles Millard was busy implementing his new “less conservative” investment strategy, under which the majority of the $55bn assets was to be shifted out of bonds and into riskier stocks and alternative asset classes.
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Opinion Pieces
Guest Viewpoint
“Seeing that the key to restoring stability lies with them, pension funds are a growing force for change”
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Opinion Pieces
Is the emperor wearing clothes?
Norman Chait argues that hedge funds should again perform their traditional role of providing genuine sources of non-correlated returns and downside protections
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Opinion Pieces
A stockpickers’ market
History suggests a good decade ahead for equities, but good stockpicking will enjoy handsome returns even in a stagnating market, argue Habib Subjally and Perry Winfield
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Opinion PiecesGuest Viewpoint
“If the PPF were to be overwhelmed by claims, the taxpayer would almost certainly end up paying”
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Opinion Pieces
University challenge
Even the ‘smartest’ money is suffering. US university endowments, the early adopters of alternative and esoteric investments, which were often recommended by their most brilliant alumni, are experiencing huge problems because of the market downturn and the illiquidity of those assets, compounded by the increase of expenses and the decline of revenues, including donations.
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Opinion Pieces
Physician, heal thyself
Are pension funds victims of the current financial meltdown or are they part of the problem?
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Opinion Pieces“A long-term average interest rate will improve the solvency position of Dutch funds”
The pension sector is in dire straits. In the Netherlands, a majority of funds show a funding ratio lower than ever, indicating that they cannot fulfil their liabilities in the long term (their funding ratio is below 100%).
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Opinion PiecesBrave new world?
When liquidity was abundant, serious bottom-up credit analysis was neglected in favour of spurious correlation assumptions. The credit crisis brings us back to a more cautious new world, writes Roger Sadewsky
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Opinion Pieces“Any ALM study should consider the effects of Black Swan events”
Pension schemes are suffering a double blow at the moment. As well as increased deficits there are also concerns about the strength of the sponsor.
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Opinion Pieces
A consultant union
A new investment consulting player was born this year, the result of the merger between Mercer and Callan. The combined Mercer-Callan entity employs around 375 people, controls about 20% of the US market and has offices in 14 cities.
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Opinion Pieces
Quo vadis IORP?
What is the future for Europe’s Institutions for Occupational Retirement Provision (IORP) directive?
