Pension Pulse

Bob Pisani of CNBC reports, Could 2018 surprise with the same outsized gains as 2017? : Will 2018 be a more "normal" year? 2017 was a year of surprises, but for 2018, not surprisingly, things are expected to be more, well, normal. Which is why you should be suspicious. It's true — by almost all measures, 2017 was one of the most extraordinary years in the history of the stock market. Investors saw : Extraordinary returns far above the norm . The S&P 500 is up nearly 20 percent this year, far above the roughly 8 percent average yearly gains since 1945. Extraordinary new highs . We hit 62 daily all-time highs this year, far above the average of 29 that have occurred in years when at least one new high was reached, according to CFRA. Extraordinarily low volatility . The S&P moved 1 percent or more on only eight trading days this year; the average since 1945 was 50 days. Extraordinary sector dispersion . The top-performing sector — technology, up 38 perc...

Patti Domm of CNBC reports, Tax bill 'winners' could help drive the stock market's traditional year-end Santa rally : Oh, by gosh, by golly, it's time for the Santa rally. According to " Stock Trader's Almanac," the Santa rally officially begins Friday, the start of the final five trading days of 2017, and ends at the close Jan. 3, the end of the second trading day of the new year. Some strategists are saying humbug to the seasonal rally because the S&P 500 has already gained 20 percent this year, with 5 percent in just the last five weeks. But Jeffrey Hirsch, editor-in-chief of the almanac, says they've got it all wrong. It's an indicator, not a seasonal trade . He says the phrase used to explain the year-end phenomena has proven to be true: "If Santa Claus should fail to call, bears will come to Broad and Wall." Hirsch notes that since 1950, the S&P 500 has averaged a consistent 1.3 percent gain in that seven-da...

Murray Brewster of CBC News reports, Ottawa pouring an extra $3.6B into veterans' benefits : The Liberal government today initiated an intricate overhaul of the system to compensate wounded ex-soldiers, but it remains to be seen whether it will be enough to placate a volatile community of Canadian veterans. The plan, rolled out by Veterans Affairs Minister Seamus O'Regan, is meant to address smouldering grievances among veterans that has led to protests and at one point spawned a class-action lawsuit . As CBC News reported last week, the changes involve a two-part rejigging of the current system . Officials outlined how that would work on Wednesday and announced there will be an injection of fresh cash beginning on April 1, 2019. O'Regan said it will take time to introduce the required legislation. Speaking on background before the announcement, officials estimated the changes would mean an extra $3.6 billion being poured into veterans benefits. "We a...

Randy Diamond of Pensions & Investments reports, CalPERS adopts new asset allocation increasing equity exposure to 50% : CalPERS' investment committee approved a new asset allocation plan on Monday that is fairly similar to the current allocation, with the equity allocation rising to 50% from 46%. The new allocation, which goes into effect July 1, 2018, supports CalPERS' 7% annualized assumed rate of return. The investment committee was considering four options, including one that lowered the rate of return to 6.5% by slashing equity exposure and another that increased it to 7.25% by increasing the exposure to almost 60% of the portfolio . A lower rate of return means more contributions from cities, towns and school districts to CalPERS. Those governmental units are already facing large contribution increases — and have complained loudly at CalPERS meetings — because a decision by the $345.1 billion pension fund's board in December 2016 to lower the rate of ret...

Zach Dubinsky and Valérie Ouellet of CBC News report, Millions of Canadians have pension money offshore — without knowing it : Palm-fringed islands, balmy weather, luxury yachts moored in azure waters — offshore tax havens conjure up a wonderland for the well-heeled and their wealth. But a CBC investigation based on the Paradise Papers leak has found that millions of ordinary Canadians also have an interest in money parked in tax havens — almost certainly without knowing it. Seven of the country's so-called Big 8 pension funds, representing more than 25 million workers, have used tax havens as they invest Canadians' retirement savings , according to records in the huge leak of offshore financial documents  made public last month . This revelation underscores a delicate quandary. On the one hand, pension funds need to make enough money to ensure they can pay benefits to an aging population, and using tax havens for investments abroad can help the bottom line. But ...

Reuters reports, Massachusetts regulator opens pension probe against MetLife : The top securities regulator in Massachusetts on Monday said he has opened an investigation of MetLife Inc after the insurer revealed last week it had failed to pay pensions to potentially thousands of people. “Retirees cannot afford to have glitches with their pension checks,” Massachusetts Secretary of the Commonwealth William Galvin said in a statement. “I want to uncover why this occurred and how MetLife is going to rectify the problem for the retirees.” MetLife, which pledged to fully cooperate with regulators, said the standard way for finding retirees who are owed benefits is no longer sufficient. “While it is still difficult to track everyone down, we have not been as aggressive as we could have been,” MetLife said in a statement . “When we realized this was a significant issue, we launched an effort to do three things: figure out what happened, strengthen our processes so that we do a...