Pension Pulse

Tom Beardsworth and Francine Lacqua of Bloomberg report, Soros Says Greece Now Lose-Lose Game After Being Mishandled : The chances of Greece leaving the euro area are now 50-50 and the country could go “down the drain,” billionaire investor George Soros said. “It’s now a lose-lose game and the best that can happen is actually muddling through,” Soros, 84, said in a Bloomberg Television interview due to air Tuesday. “Greece is a long-festering problem that was mishandled from the beginning by all parties.” Greek Prime Minister Alexis Tsipras’s government needs to persuade its creditors to sign off on a package of economic measures to free up long-withheld aid payments that will keep the country afloat. Since his January election victory, he has tried to shape an alternative to the austerity program set out in the nation’s bailout agreement, spurring concern that Greece may be forced out of the euro. The negotiations between Tsipras’s Syriza government and the institutions hel...

Kelley Holland of NBC News reports, Retirement Crisis: The Great 401(k) Experiment Has Failed for Many Americans : You need to know this number: $18,433. That's the median amount in a 401(k) savings account, according to a recent report by the Employee Benefit Research Institute. Almost 40 percent of employees have less than $10,000, even as the proportion of companies offering alternatives like defined benefit pensions continues to drop. Older workers do tend to have more savings. At Vanguard, for example, the median for savers aged 55 to 64 in 2013 was $76,381. But even at that level, millions of workers nearing retirement are on track to leave the workforce with savings that do not even approach what they will need for health care , let alone daily living. Not surprisingly, retirement is now Americans' top financial worry , according to a recent Gallup poll. To be sure, tax-advantaged 401(k) plans have provided a means for millions of retirement savers to build...

Katie Morley of the Telegraph reports, Another pension raid: the scenarios of who will have to pay : In the three years since 2012 the Government has virtually halved the sum people can save into pensions during the course of a working life, slashing it back from £1.8m to £1m. The numbers may sound big: but the retirement incomes such sums can buy is disappointing. The latest cut – announced on Wednesday in the Budget – takes the lifetime limit down from £1.25m to £1m. If your pension grows above that, the tax payable when money is subsequently withdrawn is 55pc. The Government has decided the limit will remain at £1m until 2018, before increasing in line with inflation every year thereafter. This is not much of a sweetener. The new limit will place a restrictive ceiling on the retirement incomes of middle-class workers such as doctors, middle-managers, teachers and policemen. Many will now need to change their financial plans. And even though the Budget ink is barely d...

Marcus Bensasson and Nikos Chrysoloras of Bloomberg report, Empty Greek Coffers Bring ‘Accident’ Threat Closer : With Greece’s coffers emptying and payments looming, Prime Minister Alexis Tsipras’s government is in a tight race to avoid a financial day of reckoning after receiving a “final political push” from his EU partners. While Tsipras may have bought some time after yesterday’s European Union summit in Brussels, he acknowledges Greece is facing “liquidity pressure”, without revealing how much money is left in the bank. The country’s cash shortfall is projected to hit 3.5 billion euros ($3.7 billion) in March, according to Bloomberg calculations based on 2015 budget figures. After nearly four hours of talks with German Chancellor Angela Merkel and other European leaders yesterday, Tsipras received no guarantees that creditors would unlock cash from a 240 billion-euro bailout package unless concrete steps are taken to implement agreed reforms. The EU chiefs warned hi...

Eleanor Warnock of the Wall Street Journal reports, Japan Pension Funds Announce Portfolio Shift : Three Japanese public pensions said Friday that they plan to shift more money into equities from domestic government bonds, following a similar move by the nation’s $1.1 trillion Government Pension Investment Fund. The three funds control a combined ¥30 trillion yen ($249 billion), an amount roughly the size of Greece’s gross domestic product. They will adopt the same portfolio as the GPIF, according to a statement on the GPIF’s website. The GPIF, the world’s largest pension fund, has been shifting assets to domestic and overseas equities since last year. Its reallocation—and expectations that other Japanese pension funds would follow suit—have helped push Tokyo’s Nikkei Stock Average to a 15-year high this week. The moves into riskier assets come at the urging of Prime Minister Shinzo Abe, who hopes to secure higher returns for pension funds faced with a rapidly aging popula...