All articles by Maria Teresa Cometto – Page 9
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Opinion Pieces
A labour of love
This is a busy time for pension fund professionals in the US as they try to figure out the impact of new rules issued by the department of labor (DoL) on fee disclosure and fiduciary responsibility. Changes are likely to occur soon for plan sponsors, providers, investment managers, brokers, and advisers of 401(k)s and other defined contribution plans, which reached a record $4trn (€2.8trn) in total assets and 82m participants at the end of 2010, according to Plan Sponsor.
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Opinion Pieces
Making DC kings
Fidelity is still the king of the US retirement market, at number one among the defined contribution (DC) plans with over $940bn (€651bn) of assets in custody as record keeper at the end of 2010, 12% more than the year before. And there is not a traditional bank among the ...
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Opinion Pieces
Battle to stave off crisis
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.
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Opinion Pieces
State debate hots up
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.
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Opinion Pieces
Muni transparency
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.
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Opinion Pieces
Hard target
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.
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Features
US success story
The Thrift Savings Plan serves as something of a prototype for NEST. It has widened pension participation and demonstrated good returns, reports Maria Teresa Cometto
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Opinion Pieces
Public vote for change
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 ...
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Opinion Pieces
A private equity rethink
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 ...
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News
Editor's choice: Social security reform spicing up mid-term elections in US
US – The campaign for the November mid-term Congressional elections is heating up in the US, and one topic raising temperatures is social security reform.
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Opinion Pieces
Social reform tensions
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.
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Opinion Pieces
Getting its Act together
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.
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Country Report
Italy: Political machinations
As sovereign debt levels rise, and the cost of borrowing increases, Maria Teresa Cometto reports on the effects of the pension sector on Italian public finances and the political willingness to make the necessary changes
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Opinion Pieces
Cash Balance
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.
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Opinion Pieces
Ratings war
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.
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Opinion Pieces
The state we are in
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.
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Opinion Pieces
Derivatives not WMD
Derivatives, and credit-default swaps in particular, have become synonymous with Wall Street wrongdoings, and in Europe authorities want to tightly regulate them, even ban speculative derivative trades. President Obama has promised reforms that would fix problems in the derivatives market, starting with trading all derivatives onto transparent exchanges.
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Opinion PiecesAutomatic for the people
US money managers could receive an estimated $100bn (€73bn) over five years to invest on behalf of the 78m workers who do not have a pension – 50% of US employees – if a proposal by the White House is approved by the Congress.
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Opinion Pieces
Funds lead reform calls
As Wall Street prepares to pay some of the fattest bonuses ever to its bankers and Congress remains some way from approving any substantial reform of the financial system, institutional investors such as pension funds are stepping forward to push for change – both at the political level as well ...
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Opinion Pieces
The sands shift
December 2009 may have marked the end of the downturn in US for the job market and retirement savings, after two very tough years. There were signs of stabilisation with companies starting to hire again, while employees who survived received statements from their pension funds that were no longer horrible.
