Time (February 28)
“South Korea set a fresh record for the world’s lowest fertility rate as the impact of the nation’s aging demographics looms large for its medical system, social welfare provision and economic growth.” The dearth of babies is considerably “speeding up the aging of South Korean society, generating concerns about the growing fiscal burden of public pensions and health care.”
Tags: Aging, Burden, Concerns, Demographics, Economic growth, Fertility rate, Medical system, Pensions, Record, Social welfare, South Korea
Institutional Investor (August 14)
“A public market downturn and an abundant supply of private equity stakes have culminated in an unmissable opportunity for secondaries investors.” Favorable “supply/demand imbalances and market dynamics” have arisen due to “the dramatic outperformance of private equity thanks to lagged marks and flat or marginally down valuations in 2022,” causing “asset owners to become overweight PE as public equity markets declined materially.” Pensions, endowments, foundations and other asset owners have become “forced sellers of private equity stakes to return to their strategic weights,” and “because of illiquidity, overhang, supply/demand imbalance, and forced selling, buyers require a material discount to transact.”
Tags: Asset owners, Discount, Downturn, Endowments, Forced selling, Foundations, Illiquidity, Imbalances, Market dynamics, Opportunity, Outperformance, Overhang, Overweight, Pensions, Private equity, Secondaries investors, Supply, Valuations
Institutional Investor (June 4)
Due to Brexit, “sovereign investors now consider the U.K. less attractive than they did a year ago and are instead favoring investments in Germany and India as part of a broader move to so-called safe haven markets.” The change in sentiment was identified through a survey of “sovereign wealth funds, state-owned pensions, and central banks polled by Invesco.”
Tags: Brexit, Central banks, Germany, India, Invesco, Investors, Pensions, Safe havens, Sentiment, Sovereign, U.K.
Institutional Investor (September 24)
In the U.S., mounting unfunded liabilities of state retirement systems now total $1 trillion. The states desperately need to “find ways to slash costs,” but the “figure is expected to keep growing as states continue to put off pension and liability payments, and investment returns from capital markets sit in the low single digits.”
Tags: Costs, Investment returns, Markets, Pensions, Retirement systems, States, U.S., Unfunded liabilities
Wall Street Journal (January 26)
While the Greeks are likely to remain in the eurozone, “the Syriza victory is nonetheless a rebuke to European leaders. Greeks believe, not unreasonably, that the conditions imposed by the troika have been disastrous.” Rather than “promoting pro-growth reforms,” the European Commission, European Central Bank and International Monetary Fund imposed measures focused on “draconian fiscal tightening.” The result was predictable: “falling wages and pensions and rising taxes, with no growth in return for the pain.”
Tags: Draconian, ECB, European Commission, European leaders, eurozone, Fiscal tightening, Greek, Growth, IMF, Pensions, Reforms, Syriza, Taxes, Victory, Wages
Wall Street Journal (August 29)
“In 1950 France had five people of working age per retiree. Today it has 1.4, and the ratio is expected to fall to 1.2 by 2050.” France’s newly unveiled pension reform will not “defuse” the pension bomb. “Paying for a growing number of retirees with a pay-as-you-go system that invests little for the future is a losing game. It will ultimately require much smaller pensions or much higher taxes, a fact that French businesses understand well even if the political class won’t admit it.”
Wall Street Journal (June 2)
“As some 75 million baby boomers prepare to retire, immigrants will be crucial to keeping the federal pension program afloat.” Without immigration, the U.S. social security program faces an estimated 75-year social security shortfall of over $8.5 trillion (net present value). “Immigration won’t solve all of Social Security’s financial problems…. But immigrants unquestionably narrow the funding gap. More generous immigration is a wise step toward solving the entitlement crisis in Washington.”
Tags: Baby boomers, Entitlements, Immigrants, Pensions, Retirement, Social security, U.S.
Wall Street Journal (February 14, 2012)
“Athens has agreed to carve €3.3 billion out of this year’s budget (including €300 million out of pensions), slash the minimum wage by 22%, and eliminate 150,000 government jobs by 2015.” This will not put out the fires and rioting. The Greek crisis will continue. “The larger question is whether the rest of Europe and America will learn from Greece’s chaos before they experience the same fate.”
Globe and Mail (February 11, 2012)Globe and Mail (February 11, 2012)
Canada may soon need to “join most other Western countries in raising its pension age to 67.” This will cause much debate, but Canada is actually “late entering this argument: Europeans have been having it for a decade.” Across the globe, demographics are being transformed as people live longer and choose smaller families. Were it not for immigration, Canada would have faced the pension age debate earlier.Canada may soon need to “join most other Western countries in raising its pension age to 67.” This will cause much debate, but Canada is actually “late entering this argument: Europeans have been having it for a decade.” Across the globe, demographics are being transformed as people live longer and choose smaller families. Were it not for immigration, Canada would have faced the pension age debate earlier.
Tags: Aging, Canada, Family size, Immigration, Pensions
The Economist (June 2)
“For most Brazilians life has never been so good.” Brazil’s economy has become the envy of others, but success could be its undoing. “Many of Brazil’s economic officials now have an air of smugness about them, as they argue that the rest of the world has more to learn from Brazil than vice versa.”In fact, Brazil has both pressing short-term problems, most notably inflation, and long-term structural problems such as pension reform. Because these issues require immediate attention, “the timing of such complacency could not be worse.” As the economy overheats, “the government is stalling on a deeper reform agenda that is essential to boost Brazil’s long-term growth and fiscal stability.”