Report: In a year marked by economic hardship, public pension funding is up

Link:https://www.americancityandcounty.com/2021/10/28/report-in-a-year-marked-by-economic-hardship-public-pension-funding-is-up/

Excerpt:

In a year filled with gloomy news of economic hardships and the ongoing pandemic, there’s a bright spot: the funded ratio of the 100 largest U.S. public pensions is up by more than 15 percent this year, according to Milliman’s annual analysis. 

“Surging market returns have propelled pension assets far beyond previous levels, driving the estimated funding deficit below $1 trillion for the first time since 2012,” the report says. “We estimate that nearly half of the plans in the study stood above 90 percent funded as of June 30.” 

Only 13 public pension plans were above 90 percent funded based on Milliman’s 2020 analysis. 

Author(s): Andy Castillo

Publication Date: 28 Oct 2021

Publication Site: American City and County

Statutory retirement age still needed, says Manpower Minister as Bill passed for higher retirement and re-employment ages

Link:https://www.channelnewsasia.com/singapore/retirement-reemployment-ages-older-workers-manpower-minister-tan-see-leng-2285771

Graphic:

Excerpt:

A statutory retirement age is still important as a safeguard against those employers who dismiss older employees due to their age, said Manpower Minister Tan See Leng on Tuesday (Nov 2), as Parliament voted to pass an amendment to the Retirement and Re-employment Age Act.

The Bill passed on Tuesday amends the Retirement and Re-employment Act so that the Minister for Manpower can prescribe a retirement age and re-employment age of up to 65 and 70 respectively.

This is in line with recommendations by the Tripartite Workgroup on Older Workers in 2019 that both the retirement age and re-employment age be raised by three years to 65 and 70 respectively by 2030.

Author(s): Chew Hui Min

Publication Date: 2 Nov 2021

Publication Site: Channel News Asia

U.S. Population Mortality Observations – Updated with 2020 Experience

Link:https://www.soa.org/resources/research-reports/2022/us-population-mortality/

pdf: https://www.soa.org/globalassets/assets/files/resources/research-report/2022/population-mortality-observation.pdf

Graphic:

Excerpt:

The overall age-adjusted mortality rate (both sexes) from all causes of death recorded the historically highest increase of published records dating back to 1900 of 16.8% in 2020, following a 1.2% decrease in 2019. The increase eclipsed the size of recent years’ annual volatility and exceeded the 11.7% increase in
1918 that occurred during the Spanish influenza pandemic. When COVID deaths are removed, all other
CODs’ (Cause of Death) combined mortality increased by 4.9%, which was last exceeded by a 5.6% increase in 1936.

All other CODs featured in this report had increased 2020 mortality. In many instances, the single year
mortality increases were the largest for the span of this report. Heart disease and Alzheimer’s/Dementia
had 4.7% and 7.8% increases, respectively. Other physiological CODs with lower death rates had double-digit increases. Diabetes, liver and hypertension had increases of 14.9%, 16.0% and 13.3%, respectively.
The external CODs of assaults and opioid overdoses had extreme increases at ages 15-24 of 35.9% and
61.2%, respectively.

Author(s):

Jerome Holman, FSA, MAAA, RJH Integrated Solutions, LLC
Cynthia S. MacDonald, FSA, MAAA, Society of Actuaries Research Institute

Publication Date: Jan 2022

Publication Site: SOA

Microsoft Excel: The Program’s Designer Reveals The Secrets Behind The Software That Changed the World 25 Years Ago

Link:https://www.thedailybeast.com/microsoft-excel-the-programs-designer-reveals-the-secrets-behind-the-software-that-changed-the-world-25-years-ago

Excerpt:

In a year when big names from the digital realm profoundly affected the world—Mark Zuckerberg or Julian Assange, take your pick—it’s appropriate to add one more: Douglas Klunder. While largely unnoticed, 2010 marked the 25th anniversary of perhaps the most revolutionary software program ever, Microsoft Excel, and Klunder, now an unassuming attorney and privacy activist for the American Civil Liberties Union in Washington state, gave it to us.

…..

For Doug Klunder, the mission 25 years ago wasn’t so grandiose. As lead developer of Excel, he was handed the job of vaulting Microsoft—then known best for MS-DOS, the operating system in IBM’s PCs—to the forefront in business applications. “We decided it was time to do a new, better spreadsheet,” recalls Klunder, now 50, who joined Microsoft straight out of MIT in 1981 (part of the interview process included lunch with Bill Gates and Steve Ballmer at a Shakey’s pizza parlor).

…..

Klunder and his team came up with “intelligent recalc,” an approach where the program updated only the cells affected by the data change rather than all the formulas in the spreadsheet. Klunder credits Gates with the idea for how to implement the feature—though he says Gates eventually told him he hadn’t implemented what he had in mind at all. Klunder thinks Gates misremembered the discussion, but adds, “Maybe he actually did have a more brilliant idea that now is lost forever.”

Author(s):Thomas E. Weber

Publication Date:14 July 2017 (originally published 2010)

Publication Site: Daily Beast

Original Sin (or Pandora’s Box) and Public Finance and Pensions

Link:https://marypatcampbell.substack.com/p/original-sin-or-pandoras-box-and?justPublished=true

Graphic:

Excerpt:

The kinds of messages that are welcomed are “innovative” in terms of telling you that you don’t have to do the thing you really don’t want to do (put more money into the pensions, promise less, cut back on many things, tax more, etc.)

Yes! You don’t have to fully-fund pensions!

Absolutely, pension obligation bonds will allow you to do really real arbitrage! Don’t worry about the extra leverage!

For sure, you should be chasing the waterfalls of alternative asset classes! You can get those high returns and not worry about extra risk! Otherwise, you’d have to decrease your discount rate!

Author(s): Mary Pat Campbell

Publication Date: 29 Jan 2022

Publication Site: STUMP at substack

Senator Martwick At It Again, Leading Move To Increase Chicago Pension Liability By Billions – UPDATED – Wirepoints

Link:https://wirepoints.org/senator-robert-martwick-at-it-again-leading-move-to-increase-chicago-pension-liability-by-billions-wirepoints/

Excerpt:

Illinois State Senator Robert Martwick (D-Chicago) is pushing ahead with legislation that, according to a Bloomberg report, could increase Chicago’s police pension obligations by another $3 billion in total through 2055. An earlier city estimate put the cost at $2.1 billion. Senate Bill 2105 would do that by removing a birthdate restriction on eligibility at age 55 for a 3% automatic annual increase in retirement annuity.

Where would Chicago get money to cover the additional liability? No answers.

….

Chicago’s police and firefighter pensions already are in utterly abysmal shape, having just 18% and 23%, respectively, of the assets their actuaries say they should have. Together with two other pensions sponsored by the city, Chicago officially reports about $33 billion of unfunded pension liabilities. But using more realistic assumptions, Moody’s estimates the total unfunded liability at $60 billion. Moody’s also reports the city of Chicago’s total debts as a percentage of annual revenues are at 735%, the highest of any major city in the country.

….

It’s as if Martwick is saying, “We rob banks routinely so you might as well make it legal for us to rob banks.”

Author(s): Mark Glennon

Publication Date: 28 Jan 2022

Publication Site: Wirepoints

More than 1 million have died in the overdose crisis, but still the response is scandalously inadequate

Link:https://www.washingtonpost.com/opinions/2022/01/24/dopesick-author-on-opioid-crisis/

Excerpt:

These are measures taken by people desperately fighting, largely on their own, against a drug-overdose death toll that historically has killed more Americans than the coronavirus pandemic. Since 1996, the year OxyContin launched and the United States’ health-care system fell prey to the lie that opioid painkillers were safe for virtually everything from headaches to wisdom-tooth surgery, more than 1 million Americans have died of overdoses; the coronavirus pandemic has claimed about 850,000. During the first year of the pandemic, the Centers for Disease Control and Prevention reported a record 100,000 annual overdose deaths.

….

But with an even more lethal overdose crisis — and that’s not counting all the addiction-related deaths from hepatitis, endocarditis and suicide — the nation’s leadership appears capable of only minor tweaks.

Some blue-leaning states and cities now offer evidence-backed practices such as supplying drug users with clean needles and fentanyl test strips, and even offering medically supervised spaces to inject illicit drugs — all of which foster important connections to professional care and wraparound services. But in much of the world’s richest nation, where a few million Americans suffer with opioid use disorder, these measures remain anathema.

The pandemic-prompted loosening of federal regulations for the telehealth prescribing of buprenorphine, the lifesaving addiction medication, has been a bright spot, particularly for rural people who have long struggled with transportation issues. But that policy change remains temporary and the treatment gap (with an estimated 10 to 12 percent of addicted people receiving treatment in an average year) has barely budged.

….

Epidemiologists predict that by 2029, U.S. overdose deaths will have doubled to nearly 2 million. Until we stop arresting and abandoning people who use drugs and start meeting them where they are with treatment and compassion, rare will be the family that remains untouched.

Author(s): Beth Macy

Publication Date: 24 Jan 2022

Publication Site: Washington Post

Equity Market Volatility Spikes to Start 2022

Link:https://content.naic.org/sites/default/files/capital-markets-hotspot-Equity-Market-Drop-Jan-2022.pdf

Graphic:

Excerpt:

Both economic and geopolitical factors have caused some volatility in the financial markets, including a
recent significant decline in equity markets into “correction territory,” or a decrease greater than 10%.
Equity markets have been declining over the last few weeks after reaching a record high at the
beginning of 2022 when Standard & Poor’s 500 Index (S&P 500) reached almost 4,800. On Jan. 24, the
S&P 500 was down as much as 2% intraday, but it rebounded to finish the day up 0.3%. Volatility
continued into the following trading day, with the index declining 1.2% on Jan. 25.

Author(s): Jennifer Johnson, Michele Wong, and Jean-Baptiste Carelus

Publication Date:25 Jan 2022

Publication Site: NAIC Capital Markets Bureau

Suicide Risk Screenings Can Save Lives

Link: https://www.pewtrusts.org/en/research-and-analysis/articles/2022/01/25/suicide-risk-screenings-can-save-lives

Excerpt:

Suicide was the 12th leading cause of death in the United States in 2020.

The overall U.S. suicide rate grew 33% from 1999 to 2019, according to the Centers for Disease Control and Prevention. CDC reports even higher increases among certain racial and ethnic groups: American Indian and Alaska Native women (139%) and men (71%), Black women (65%), White women (68%) and men (40%), and Hispanic women (37%). Other people at greater risk of suicide include veterans, people who identify as LGBTQ, youth and young adults, and disaster survivors.

….

According to a recent study, about half of people who died by suicide over the 10-year period examined had seen a health care professional at least once in the month before their death. Additional research suggests that, if they were screened for suicide risk by those providers, many might have received care and survived. Indeed, a 2017 study of eight emergency departments across seven states found 30% fewer suicide attempts among patients who were screened and received evidence-based care compared with patients who were not screened. Another study that looked at veterans affairs hospitals found that patients who were screened and then received clinical interventions were half as likely to experience suicidal behavior and more than twice as likely to attend mental health treatment compared with those who received usual care.

Author(s): Kristen Mizzi Angelone

Publication Date: 25 Jan 2022

Publication Site: Pew

Growth in Private Ratings Among U.S. Insurer Bond Investments and
Credit Rating Differences

Link:https://content.naic.org/sites/default/files/capital-markets-special-reports-PLR-Rating-Differences.pdf

Graphic:

Excerpt:

The number of privately rated securities reported by U.S. insurance companies totaled 5,580 at
year-end 2021, an increase from 4,231 in 2020 and 2,850 in 2019.
• Small credit rating providers (CRPs) to the NAIC, such as Egan-Jones, DBRS Morningstar, and the
Kroll Bond Rating Agency LLC (KBRA), produced a dominant share of the private letter ratings
(PLRs), accounting for almost 83% of U.S. insurers’ privately rated securities as of Dec. 31, 2021.
• Designations based on PLRs averaged 2.375 notches higher than designations assigned by the
NAIC Securities Valuation Office (SVO) according to data from 2019 through Q3 2021.
• Based on the credit rating analysis conducted by the SVO, the use of PLRs can result in lower
risk-based capital (RBC) charges and potentially lead to the undercapitalization of insurance
companies.
• Regulatory oversight of nationally recognized statistical rating organizations (NRSROs) does not
result in uniform ratings across the NAIC’s CRPs.
• Ten U.S. insurer groups accounted for 55% of the industry’s exposure to privately rated
securities at year-end 2020.
• No significant issuer concentrations of privately rated securities were noted.

Author(s): Jennifer Johnson, Michele Wong, and Linda Phelps

Publication Date:21 Jan 2022

Publication Site: NAIC Capital Markets Special Bureau

U.S. Insurance Industry Outsourcing to Unaffiliated Investment Managers
Unchanged From 2019 to 2020

Link:https://content.naic.org/sites/default/files/capital-markets-special-reports-IM-Outsourcing-YE2020.pdf

Graphic:

Excerpt:

The percentage of U.S. insurers that reported outsourcing investment management to an
unaffiliated firm has remained relatively unchanged at year-end 2020, compared to the last
several years; it was about half of all U.S. insurers, dating back to at least 2016.
Consistent with prior years, small insurers, or those with less than $250 million in assets under
management (AUM), accounted for the largest percentage, or 63% of the total number of U.S.
insurers, that outsourced investment management.
Property/casualty (P/C) companies continue to account for almost 60% of the total number of
U.S. insurers that outsource to unaffiliated investment managers.
For U.S. insurers that named the unaffiliated investment management firms that they utilize,
BlackRock, Conning, and New England Asset Management Inc. (NEAM) have been the top three
most-named investment managers over the last few years.

Author(s): Jennifer Johnson and Jean-Baptiste Carelus

Publication Date: 18 Jan 2022

Publication Site: NAIC Capital Markets Special Bureau