Public Pensions’ New Quandary: Coping With Geopolitical Turmoil

Link: https://www.governing.com/finance/public-pensions-new-quandary-coping-with-geopolitical-turmoil

Excerpt:

Arguably, trustees and investment teams need a serious conversation with portfolio managers who are overweight in companies and countries that could foreseeably lose favor and stock exchange value. To ground that dialog, some form of risk analysis is required. One protocol could be as primitive as routinely identifying which major corporate equity and debt holdings in a system’s portfolio have cost and revenue exposure of more than 10 or 15 percent in such potentially at-risk regimes, and prodding managers to trim down those geopolitically vulnerable positions unless there is a clearly compelling undervaluation thesis. Another sensible approach would be to require underweighting of major companies relative to a benchmark index, based on their percentages of autocrat-nation revenues.

Ultimately at a fiduciary level, if a pension fund’s total worst-case exposure to all earnings and income derived from autocratic nations is an insignificant fraction of its total portfolio, the composite risk is probably not worth losing sleep over, on purely financial grounds. But politics could still enter the theater stage for pension boards that ignore this issue.

Pension consultants and risk advisers have a new role to play in this dialog. ESG investing is now under fire, so a healthy ESG+G discussion is especially timely. If nothing else, informed advisers can help investment teams and trustees identify where their portfolios might contain a blind-side risk that hasn’t received enough attention.

Author(s): Girard Miller

Publication Date: 10 May 2022

Publication Site: Governing

Central States Fall

Link: https://burypensions.wordpress.com/2022/05/09/central-states-fall/

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Excerpt:

All 1,298 pages of the Central States, Southeast and Southwest Areas Pension Fund bailout application is on the SFA website but, for me, it is these two pages that tell the tale of the fall of this and many other union pension plans.

…..

Funded ratio: 21.91%

Unfunded Liabilities as of 1/1/20: $43,878,930,013

Asset Value (Market) as of 12/31/20: $10,409,490,502

Contributions 2020 (MB): $662,009,633

Contributions 2020 (H): $406,600,320

Payouts 2020: $2,842,184,040

Expenses 2019: $53,552,2071

Author(s): John Bury

Publication Date: 9 May 2022

Publication Site: burypensions

COVID-19 Deaths Cause More Than $700M in Q1 Claims

Link: https://www.thinkadvisor.com/2022/05/09/covid-19-deaths-continue-to-hit-life-insurers-hard/

Excerpt:

Reinsurance Group of America — a Chesterfield, Missouri-based reinsurer — said its U.S. COVID-19 individual life claims fell to $260 million in the latest quarter, from $340 million a year earlier.

“Our U.S. individual mortality results are very consistent with what we are seeing in the general population this quarter,” Jonathan Porter, RGA’s global chief risk officer, said Friday, during a conference call with securities analysts. “We saw a reduction in our claim cost per 10,000 general population deaths as compared to the third quarter and fourth quarter of 2021. This improvement, we believe, is in part due to the lower proportion of deaths in working ages.”

Here’s what happened to U.S. COVID-19 claim statistics at some other life insurers, including some that are known mainly for group life:

MetLife: $230 million in world group life claims this quarter, down from $280 million a year earlier.

Hartford Financial: $96 million before taxes this quarter, down from $185 million a year earlier.

Unum: 1,400 deaths at an average of $55,000, or $77 million, down from 1,725 deaths at an average of $65,000, or $112 million, a year earlier.

Lincoln Financial: $53 million in group life claim claims and $18 million in group disability claims this quarter, down from $83 million in group life claims and $7 million in group disability claims a year earlier.

Voya: $35 million in group life claims this quarter, up from $29 million a year earlier.

Primerica: $16 million in life claims this quarter, down from $21 million a year earlier.

Author(s): Allison Bell

Publication Date: 9 May 2022

Publication Site: Think Advisor

Few Retirees Leave Workforce Gradually: EBRI

Link: https://www.thinkadvisor.com/2022/05/02/few-retirees-leave-workforce-gradually-ebri/

Excerpt:

The 32nd EBRI survey found 7 in 10 workers were at least somewhat confident they would live comfortably in retirement.

Half of workers plan to retire at 65 or later, while current retirees left the workforce at a median age of 62.

Large shares of workers say they don’t understand managed accounts, ESG investments or target date funds.

Author(s): Ginger Szala

Publication Date: 2 May 2022

Publication Site: Think Advisor

The Fed’s Preferred Measure of Inflation Jumps to 6.6%, a 40-Year High

Link: https://mishtalk.com/economics/the-feds-preferred-measure-of-inflation-jumps-to-6-6-a-40-year-high

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Excerpt:

The PCE price index for March increased 6.6 percent from one year ago, reflecting increases in both goods and services. 

Energy prices increased 33.9 percent

Food prices increased 9.2 percent. 

Excluding food and energy, the PCE price index for March increased 5.2 percent from one year ago.

Author(s): Mike Shedlock

Publication Date: 30 April 2022

Publication Site: Mish Talk

President Biden changing his mind on student loan forgiveness ‘is a tremendous victory,’ Rep. Pressley says

Link: https://finance.yahoo.com/news/student-loan-forgiveness-biden-pressley-141234731.html

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Excerpt:

Pressley, alongside Senate Majority Leader Chuck Schumer (D-NY), and Senator Elizabeth Warren (D-MA) have repeatedly called on Biden to cancel $50,000 in student loan debt immediately via executive order on the premise that there is sufficient legal backing for the administration to do so.

….

Cancelling $10,000 in student loan debt per borrower would help the most number of borrowers at the lowest cost, recent research from the New York Fed found.

The Fed researchers, using data from the New York Fed/Equifax Consumer Credit Panel, estimated the cost of two federal loan forgiveness proposals, one for $10,000 and another for $50,000. They found that limited forgiveness and placing income caps on who would be eligible would “distribute a larger share of benefits” to low-income borrowers while also reducing the cost of forgiveness.

Rep. Pressley has repeatedly stressed that women and people of color hold significant levels of student loan debt and that cancellation would represent a massively impactful form of relief given the disproportionate burden.

Author(s): Aarthi Swaminathan

Publication Date: 30 Apr 2022

Publication Site: Yahoo Finance

Trends in Life Insurance 2022: How the Industry Has Changed

Link: https://www.soa.org/sections/reinsurance/reinsurance-newsletter/2022/april/rsn-2022-04-gambhir/

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Excerpt:

Growing popularity in no-medical-exam life insurance products has had one expected outcome: More life insurance policies with accelerated underwriting options available in the marketplace. For example, Policygenius offered just three accelerated underwriting options in 2020. In 2021, that number more than doubled to seven, and more options will likely be available in 2022.

Additionally, while such policies had historically only been available to applicants who were young and in good health, the competitive market has prompted more widespread availability. Now, applicants across all health classes can get no-medical-exam policies.

While no-medical-exam policies tend to be about the same cost as fully underwritten policies, applicants tend to favor them even when they are more expensive due to the convenience and expedited turnaround time.

Author(s): Nupur Gambhir

Publication Date: April 2022

Publication Site: Reinsurance News, SOA

All Men Must Die, But They Don’t Have to Die in Office

Link: https://marypatcampbell.substack.com/p/all-men-must-die-but-they-dont-have?s=w

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What’s interesting about the Senate age distribution is that though we have some difference in the lumpiness, when I look at the average age of the senators by party, they’re basically the same: 64 years old (and some change). On the younger end of the Boomers.

Author(s): Mary Pat Campbell

Publication Date: 29 April 2022

Publication Site: STUMP at substack

Breaking News: Central States Filed

Link: https://burypensions.wordpress.com/2022/04/29/breaking-news-central-states-filed/

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Excerpt:

The first 34 plans that filed requested a total $8.4 billion in bailout money from the PBGC Special Financial Assistance program for troubled multiemployer plans. No press release but the PBGC weekend update showed one new plan – the Central States, Southeast & Southwest Areas Pension Plan with 364,908 participants which is asking for $35 billion dollars.

Author(s): John Bury

Publication Date: 29 Apr 2022

Publication Site: burypensions

Severe hepatitis of ‘unknown origin’ in children being investigated in Canada

Link: https://www.cbc.ca/news/health/liver-disease-mystery-1.6431872

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Public health officials say they’re investigating cases of severe liver disease “of unknown origin” among children in Canada as global scientists race to understand a mysterious hepatitis outbreak that has affected nearly 200 youths around the world.

“The Public Health Agency of Canada is aware of reports of severe acute hepatitis of unknown origin in young children in Canada,” the department said in a statement on Tuesday, in response to questions from CBC News.

“These are being investigated further to determine if they are related to cases in the United Kingdom and the United States. As the investigation evolves, we will keep the public updated accordingly.”

The latest available data from the World Health Organization (WHO) shows at least 169 cases of acute hepatitis of unknown origin have been reported in close to a dozen countries, with the bulk of the reports — 114 — from the U.K. 

Author(s): Lauren Pelley

Publication Date: 26 April 2022

Publication Site: CBC

1 death, 17 liver transplants in multi-country outbreak of hepatitis in children, WHO says

Link: https://www.cnn.com/2022/04/23/health/multi-country-outbreak-of-hepatitis-in-children/index.html

Excerpt:

At least 169 cases of acute hepatitis in children aged one month to 16 years old have been identified in an outbreak that now involves 11 countries, the World Health Organization (WHO) said on Saturday.

Among the cases of acute hepatitis, at least one child has died and 17 children have required liver transplants, the WHO said in a news release.

“It is not yet clear if there has been an increase in hepatitis cases, or an increase in awareness of hepatitis cases that occur at the expected rate but go undetected,” the WHO said in a statement. “While adenovirus is a possible hypothesis, investigations are ongoing for the causative agent.”

Author(s): John Bonifield, Emma Tucker

Publication Date: 23 April 2022

Publication Site: CNN