United Nations invests in hedge funds, US pensions face huge losses, Netherlands considers pension options.
OECD and World Bank calls for pension modernisation A joint OECD/World Bank report calls for urgent reform of Asia's retirement income systems, which it says are not prepared for the rapid population ageing forecast over the next two decades.
The "Pensions at a Glance: Asia/Pacific" report analysed the retirement income systems of 18 Asian countries.
In OECD countries, an average of 70 per cent of the working-age population is eligible for a pension. However, in South Asia just 7.5 per cent of the working-age population is eligible and in East Asia only 18 per cent, the report said.
The report recommended that Asian countries with defined-benefit schemes should shift to calculating pension entitlements using lifetime average earnings and employees should be allowed to take out their savings only on retirement via regular payments (annuities). Countries should also link pension payments to reflect changes in the cost of living - currently only observed in China and the Philippines.
British Trade Union urges responsible investing The British Trades Union Congress (TUC) is urging the British government, pension schemes and fund managers to back a series of proposals on responsible investment.
A joint statement signed on 16 January 2009 by Treasury Select Committee chair John McFall, Work and Pensions Select Committee chair Terry Rooney as well as TUC general secretary Brendan Barber called for pension funds to insert a "do no harm" clause into their statement of investment principles, requiring fund managers and advisers to satisfy pension fund trustees that their investment decisions are not causing systemic harm to the financial system.
The group also recommended that large institutional pension funds sign up to the United Nations-backed Principles of Responsible Investment (PRI).
The TUC supports a network of 1,000 trade union trustees and provides its own stakeholder pension scheme.
British to work longer? Workers may no longer have to retire at 65 under proposed changes to retirement laws in the UK. And that could be retrospectively applied to employees already signed to contracts with a retirement age of 65.
The UK's Daily Telegraph reports that the British government is acting to help those caught up in the current pensions slump, which is tied to the wider financial and economic crisis.
The changes proposed would be optional and are not likely to come into effect until after 2011, when the government is expected to complete its review.
Already the retirement age is recognised by the government as the "default retirement age", but companies are not compelled to allow workers to remain on after 65. And new proposals to raise the age could meet resistance from business groups.
Netherlands considers pension options The Netherlands government has set a deadline of 1 April 2009 to have a recovery plan in place for Dutch pensions.
The Dutch central bank and pension regulator DNB will survey an estimated 20 pension funds in February to determine whether extra measures are needed to help pension funds survive the current crisis.
One of the key areas for review are underfunded pension funds. Those with a cover ratio of less than 105 per cent will have to inform the regulator of plans to improve their position within a three-year period.
UN to invest in hedge funds The United Nations (UN) still see opportunities in hedge funds despite the ongoing slowdown in the industry.
The UN's Joint Staff Pension Fund (UNJSPF) received the go-ahead this month from the UN Secretary General to start investing in funds of hedge funds as well as private equity funds.
UNJSPF has not yet specified investment plans but said it was seeking experienced consultants for the "analysis, selection, placement and monitoring of hedge fund of funds and private equity placements".
US state pensions face huge losses Bloomberg reports that US state governments have an estimated US$865.1 billion ($1,328.3 billion) in pension fund losses.
According to the Center for Retirement Research at Boston College, assets for 109 state funds fell 37 per cent to US$1.46 trillion ($2.24 trillion) over the 14 months through December 2008.
Bloomberg interviewed Philadelphia Mayor Michael Nutter, who has approached the US Treasury along with other US states to appeal for financial aid, citing investment deficits and rising pension costs for state workers.
"Not a lot of people get too excited about pension funds. But if you have to pay those costs, they do grab your attention," Nutter said.
To cut future pension costs, some US states are creating two-tiered systems offering less to new employees. Some states are also looking at raising the retirement age from 55 to 62.
Calpers picks CEO The largest pension public pension fund in the US, the California Public Employees' Retirement System (Calpers), picked a new chief executive in January. The position had been vacant for six months since Fred Buenrostro left in mid-2008 along with chief investment officer Russell Read.
The fund appointed Anne Stausboll in January - the fund's first female chief executive - and is still to replace Read. Stausboll has been with Calpers for six years as chief operating investment officer. Calpers has assets worth US$182 billion ($280 billion).
