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  #301  
Old 07-11-2018, 03:19 PM
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SOUTH KOREA

http://www.businesskorea.co.kr/news/...ml?idxno=23557

Quote:
NPS Suffering from a Worsening Investment Staff Exodus
Spoiler:
The National Pension Service (NPS) has been operating without the chief officer of national pension fund management for a year.
....
The National Pension Service (NPS), the world's third-largest pension fund which oversees 630 trillion won (US$566.29 billion) of South Korea’s public pension assets, is now facing a crisis. There are even growing concerns that the pension fund can be disassembled, with an increasing number of employees leaving the company. Since there are not enough employees investing, the NPS shows poor earnings rates.

The “investment staff exodus” from NPS is largely because its new office was relocated far from Seoul last year and the NPS has been operating without the chief officer in charge of managing national pension fund assets for a year. The position of overseas alternative investment chief has been vacant for a year and five months and chief officer of stock investment has been recently dismissed from the post. Cho In-sik, head of overseas securities, who has served as the acting chief officer of national pension fund management, has tendered his resignation. In regard to asset management, four out of seven positions for directors and coaches who have a primary responsibility have been operated with patch-up.

This also triggered exodus of hands-on investment officers. Right before its new office was relocated to the provincial city of Jeonju, 30 employees handed in their resignation in 2016, 27 in 2017 and 10 this year. The number of investment employees at the NPS decreased from 274 to 242 at the end of June.

The government is also aware of the problems. When the Ministry of Strategy and Finance announced the fund evaluation results in May, it pointed out, “The NPS should raise expertise of the investment team and come up with measures to prevent workforce exodus that has occurred after the shift to Jeonju.”


Given the current situation, it is only natural that the NPS earnings rates have deteriorated. According to the NPS, its earnings rate stood at -0.21 percent in the first quarter this year. It even lost the principal. Its average rate of returns in the past five years also came to 5.81 percent, less than half the rate of the world’s top six pension funds such as Canada with 12.24 percent, and the Netherlands and Norway with 9.32 percent and the United States with 9.16 percent. Its earnings rate last year was 7.28 percent, reaching a five-year high, but it still fell short of the Government Employees Pension Service with 8.8 percent and the Korea Teachers Pension with 9.2 percent over the same period.
.....
Since the NPS doesn’t have enough labor pool, it has a low percentage of overseas securities and alternative investment. Currently, the NPS’ share of home investment exceeds 70 percent. As of the end of last year, the NPS could exercise its voting rights in more than 770 South Korean companies and had over 5 percent of stake in 300 companies. This is why the NPS is criticized as a “whale in a pond.”

The NPS should first expand investment in overseas securities and alternative investment further in order to delay pension exhaustion as much as possible. Currently, the NPS has a 50 percent share of bond investment. The California Public Employees' Retirement System in the US invests only 19 percent of capital in bonds and the remaining in stocks and actual assets. The Netherlands’ public funds also invests 30 percent of its assets in bonds and the remaining in stocks and alternative investment.

The NPS also needs to dramatically increase investment in overseas assets from the current 20 percent. Japan’s Government Pension Investment Fund invests 40 percent of its funds in overseas assets, while Canada Pension Plan Investment Board invests 80 percent. A head of the pension and funds management division at a securities firm said, “The government should give independence and autonomy to the NPS and stop making an attempt to drag NPS’ savings into political business.”
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  #302  
Old 07-15-2018, 08:40 PM
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IRELAND
DIVESTMENT

http://ipfiusa.org/2018/07/13/ipfi-r...nts-from-ipfi/

Quote:
IPFI Responds to Irish Divestment – IPFIUSA

Spoiler:
On July 12 it was reported that the government of*The Republic of Ireland*would become the first country in the world to sell off its investments in fossil fuel companies. The divestment bill passed through the lower house of parliament with all-party support and will require the $9.3 billion*National Investment Fund to sell its investments in coal, oil, gas and peat “as soon as is practicable.” This divestment action, one that will cost the government of*Ireland millions in frictional costs and re-investment fees, came at the behest of an environmental movement aimed at decreasing the financial position of major fossil fuel companies. This type of action is unacceptable to IPFI and our President Christopher Burnham. Political decisions such as this one do not put the needs of the fund at the forefront of decision-making.
The Republic of Ireland ranked recently as the*second worst European county for climate action. This ranking undoubtedly drove leadership to make this hasty and ill-informed decision. The divestment action is being heralded as a blow to fossil fuel corporations and their value- but this is not the case. When an entity chooses to divest holdings, the company divested from does*not lose value, as shares are bought on a secondary market by investors not holding the same qualms as the original stockholders. By divesting,*The Republic of Ireland has lost its ability to engage leaders at shareholder meetings, leaving the fund instead with fewer holdings (less diverse funds are less risk averse funds) and millions to reinvest in less-proven industries.
This political maneuver was ill-advised and as an organization that exists to keep politics out of the management of public funds, IPFI cannot condone this action.

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  #303  
Old 07-15-2018, 09:18 PM
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RUSSIA

http://www.euronews.com/2018/07/06/r...reform-sources
Quote:
Russian authorities prepare to soften pension reform - sources | Euronews

Spoiler:
MOSCOW (Reuters) – Russian authorities are considering ways to soften a plan to raise the pension age, two sources familiar with the discussions told Reuters, following protests and a slide in President Vladimir Putin’s popularity ratings.
The government announced its plan last month to raise the retirement age for men to 65 from 60 and for women to 63 from 55 to ease pressure on state coffers from an ageing population and weak economic growth made worse by the impact of sanctions.
Since the plan was announced – on June 14, the opening day of the soccer World Cup which Russia is hosting – opinion polls have shown a drop in Putin’s normally robust ratings and thousands of Russians have attended protest rallies.
The two sources, speaking on condition of anonymity, said senior officials were holding discussions about options for softening the law, though they also stressed no final decision had been taken.
“There are different proposals (under consideration) – for example, an increase of five, not eight years, for women,” said one of the sources.
“Something will be softened during the (discussions) process,” said the second source close to the discussions, without providing further details.
A third source, who is close to the Kremlin, said he expected a final decision on pension reform by September, ahead of elections in some Russian regions, including a vote for Moscow’s mayor and the governor of the Moscow region.
Dmitry Peskov, the Kremlin spokesman, told reporters on Friday the government and the lower chamber of parliament, the State Duma, were working on the pension reform.
“The president is aware of the (people’s) reaction to the proposals and parameters,” Peskov said, without elaborating.
PUBLIC DISCONTENT
Natalia Timakova, spokeswoman for Prime Minister Dmitry Medvedev, told Reuters the proposals made by the government last month remained “the working variant”.
After Medvedev announced the proposal, a survey by the FOM pollster showed that the number of Russians who said they would vote for Putin had fallen by eight percentage points in a week to 54 from 62 percent and that his approval rating was down six percentage points to 69 from 75 percent.
According to the FOM pollster, around 80 percent of Russians are against the retirement age increase. Another poll, by the state VTsIOM pollster, showed that Putin’s approval rating had tumbled by around five percent.
Last Sunday thousands of people attended protest rallies led by supporters of Alexei Navalny, the most prominent Kremlin critic, around the country, though there were no demonstrations in cities hosting the World Cup due to security restrictions in force during the tournament.
Navalny published photos of the protests with people carrying placards with slogans including “Raise the pension, not the pension age!” and “Hands off our pensions!”.
The Russian budget is under pressure from a growing number of pensioners and a shrinking workforce caused by a sluggish birth rate in the early 2000s.
A higher pension age would allow the government to raise pension payments while freeing up state funds that could be spent on spurring economic growth amid Western financial and economic sanctions.
But analysts at Alfa Bank said in a note to investors that the chances for a softening of the reform were “quite high”.
“The scale of the negative reaction to the pension reform is big: Putin’s rating has fallen… to its lowest since 2013,” Alfa said. “People’s negative reaction increases the chances that the authorities will choose to make a compromise.”
A second source close to the Kremlin told Reuters: “It is obvious that the president must make a present (to people).”

https://worldview.stratfor.com/artic...a-dilemma-ages
Quote:
In Russia, a Wave of Protest Greets Pension Reform Plans

Spoiler:
While the World Cup soccer tournament has drawn the world's attention to Russia, an issue that will affect millions of its citizens has been unfolding at the same time, albeit with less fanfare. For the past month, one of the most sensitive and politically charged matters in the country has been a plan to increase the retirement age. The details of the proposal were announced June 14 by Russian Prime Minister Dmitri Medvedev, and the draft plan stipulates increasing the retirement age in stages beginning in 2019. For men, the age would rise from the current number of 60 to 65 by 2028. For women, it would rise from the current 55 to 63 by 2034.
The Big Picture
In the 2018 Annual Forecast, Stratfor highlighted Russia's prolonged economic stagnation as a key issue for the Kremlin. The announcement of plans to raise the retirement age fits within the government's efforts to stabilize its financial position in the long term, but that increase may come with a significant political price tag.
See 2018 Annual Forecast
The pension reforms are part of a long-deliberated plan by the government to cut spending. Raising the retirement age has become a key component of the*Kremlin's plan to deal with the economic strain*that has followed years of sanctions imposed by the United States and the European Union and the dip in global energy prices. Russia's Pension Fund reportedly has enough assets to cover only 60 percent of its obligations to current pensioners, with the balance of payments coming from the annual government budget. According to a think tank affiliated with the Russian Finance Ministry, the retirement age increase could help reduce the budget transfers needed to prop up the fund by*up to 1.7 trillion rubles ($27.3 billion) per year.

Raising the retirement age, therefore, would allow the government to both increase pensions and tackle inflation. Labor Minister Maxim Topilin has stated that if fewer people were drawing pensions, individual payments could rise as much as 10 percent within a few years. The appointment of reform advocate Alexei Kudrin as chairman of the Russian Accounts Chamber after*Putin's inauguration in May*demonstrated that the country would become more serious about economic reform in the president's fourth term. Kudrin said that if the current plan to raise the retirement age were fully implemented, pension payments could be increased by as much as 30 percent.

However, raising the retirement age has always been a controversial topic in Russia, where life expectancy is significantly lower than in most Western countries. According to data from the World Health Organization, male life expectancy there in 2017 was 64.7 and female life expectancy was 76.3. Although the government forecasts that life expectancy will increase to 70 for men and 80 for women by 2034, the fact that the ultimate male retirement age exceeds the current life expectancy has made the reform plan quite unpopular.

Protests against the reforms have taken place over the past month across Russia despite the decree that public demonstrations would not be allowed in the 11 World Cup host cities during the tournament. Protests have still occurred in numerous cities that are not match sites. While these protests were initially organized by small, local parties, national opposition leader Alexei Navalny has joined the cause, setting up protests in 20 cities on July 1. Russia's largest labor unions have also spearheaded opposition to the measure. The Federation of Independent Trade Unions has joined in the calls for protest, and the Confederation of Labor started a petition against the pension reforms that has attracted more than 2 million signatures in a matter of a few days.
The demonstrations thus far have been relatively small, generally drawing hundreds of people, and up to a few thousand in cities such as Omsk at their peak. But the protest movement has persisted for nearly a month, and once the World Cup concludes on July 15, demonstrations could again be held in larger cities, including Moscow. That means the rallies could grow in size and scope in the coming weeks as opposition parties across the political spectrum, from the liberal Yabloko to the right-wing Liberal Democratic Party, look to take advantage of the popular discontent.

https://www.dw.com/en/russians-outra...lan/a-44501313
Quote:
Russians outraged by pension reform plan | Business| Economy and finance news from a German perspective | DW | 03.07.2018

Spoiler:
Tens of thousands of Russians have been protesting against a government pension reform proposal that includes raising the retirement age for both men and women. DW's Miodrag Soric reports from Moscow.
There's growing resistance to Russian Prime Minister Dmitry Medvedev's planned overhaul of the pension system. Thousands have taken to the streets to protest the gradual increase of the retirement age.
In a step-by-step process, the retirement age for women is to rise to 63 by 2034. Men will be able to retire at the age of 65 by 2028. In line with a 1932*law, women have so far been able to retire at 55, men at 60. Interim attempts to raise the retirement age have all failed, with the last such effort coming to nothing in 2005.
Back then, President Vladimir Putin promised not to touch the current retirement age "as long as I'm president." Right now, though, he's keeping mum about the prime minister's proposal. In fact, many experts believe he's sent Medvedev into the battle on his own behalf to see how ordinary Russians will react.
If resistance to the reform plans grows too strong, Putin could then back-pedal or try to find a mutually acceptable compromise.
A matter of comparison
By European and global standards, Russians get to retire early. What many critics fail to consider is that the pensions paid out are hardly enough to make ends meet. That's why most people continue to work as long as they're healthy enough to do so.
According to official figures, the average pension in Russia is 13,342 rubles (€180, $210) — that's not exactly much, but is nonetheless an important financial contribution to ease hardships.
Authorities have so far allowed protests against the pension reform plans in all cities in which there are no World Cup matches going on. Once the soccer tournament is over, protests are expected to also reach Moscow and St. Petersburg. Recent polls have shown that nine in 10 Russians are opposed to raising the retirement age.
Millions of Russians are concerned they might not live long enough to get any pension payouts. Men's average life expectancy is 67.5 years. If they were to retire*at 65, they would be receiving payouts for only two years. Add to this that in 47 of a total of 83 regions in the country average life expectancy is even below 65 years.
Treated unfairly?
Hence many people think the planned reform is a grave injustice — to get nothing back from the pension fund after a tough*working life, the economic hardships experienced in the former Soviet Union and the upheavals of*the 1990s. It's no consolation for them to hear that the average life expectancy is forecast to rise over the next couple of decades.

As Moscow floats its pension reform proposals, a higher retirement age is widely perceived among Russians as being unfair
Furthermore, hundreds of thousands of people didn't have regular work contracts in the 1990s, and that impacts their pension payouts. So, many pensioners would be punished once more for the state's inability back then to make an orderly transition from a planned to a free market economy and cushion the social effects of the dramatic changes.
People are also angry about what they perceive to be the government's clumsy maneuvers. On the eve of the World Cup, Prime Minister*Medvedev announced the reform plans, giving rise to speculation that the Kremlin was hoping to push through a highly unpopular measure while people were busy watching soccer games.
Critics galore
Independent trade unions and regime critics are now trying to profit from this blunder. Supporters of opposition leader Alexei Navalny have called on people to organize protests, as have*the ultra-left Levy Front and others. In Omsk, Vladivostok and Tver, thousands of people took to the streets to demand Putin's resignation and that of the whole government.
Communist leader Gennady Zyuganov points out rightly that the popularity of the governing parties has fallen 12 percent in the past few weeks, while the Communists have gained 5 percent. The latter aim to stage a nationwide referendum on the government's proposal. A petition against the plans has already been signed by 2.6 million people.
What's troubling the Kremlin is that resistance to the pension reform is uniting parliamentary and non-parliamentary opposition forces. Among the opponents is exiled oligarch Mikhail Khodorkovsky.
The current public debate has tended to give short shrift to purely economic factors, including Russia's demographic problem. There are 43 million pensioners in the country. The number of those paying into the pension system is falling, while the number of people entitled to a pension is rising. Average life expectancy has increased by seven years since 2005. Since 2012, Putin has hiked pension payouts by 40 percent, which has been a heavy burden on state coffers. But the state can only provide adequate financing as long as oil and gas prices are sufficiently high.
Moscow*pumps some €45 billion into the statutory pension fund annually. Making private provisions for old age is not a popular concept with most Russians who still tend to rely heavily on the state.
No matter what the World Cup may bring for Russia — the Kremlin looks unlikely to be able to ignore the groundswell of opinion against the pension reform plans forever.

https://www.reuters.com/article/us-s...-idUSKBN1JY0GQ
Quote:
World Cup exit strips Putin of cover for pension reforms | Reuters

Spoiler:
MOSCOW (Reuters) - Russia’s elimination from the soccer World Cup on Saturday poses a challenge for the Kremlin: How to manage public anger over reforms that will hit voters’ pockets without the distraction of national sporting success.


FILE PHOTO: Russia's President Vladimir Putin (C) poses for a picture with (L-R) former player of team Germany Lothar Matthaeus, FIFA President Gianni Infantino, First Vice President of the Russian Football Union Nikita Simonyan, former player of team Denmark Peter Schmeichel and former player of team Mexico Jorge Campos during a meeting at the Kremlin in Moscow, Russia July 6, 2018. Sputnik/Alexei Druzhinin/Kremlin via REUTERS
After months of delaying a change it knew was liable to anger voters, the government said it was pushing back the retirement age. It made the announcement on the day of the tournament’s opening game, when many Russians were distracted by their team’s emphatic win against Saudi Arabia.
Since then, Putin’s popularity rating has suffered a rare dip, opinion polls show. A separate survey found that most Russians take a negative view of the plan to raise the pension age to 65 from 60 for men and to 63 from 55 for women.
Russia’s unexpected passage to the quarter-finals — their best World Cup since the 1991 fall of the Soviet Union — has captivated the nation and kept the reform out of mind.
But after Saturday’s defeat to Croatia and with the tournament due to end on July 15, the reforms are bound to resurface in Russia’s collective psyche, political analysts say.
Though perceived outside Russia as an all-powerful ruler unruffled by what people think, Putin’s authority in fact depends in large part on his ability to command popular support, which he and his aides devote massive energy to nurturing.
Following the polling backlash, officials were now considering ways to soften the pension reform, two sources familiar with discussions told Reuters.
“Any victory comes and goes. People forget,” said Nikolai Petrov, a political analyst at Moscow’s Higher School of Economics.
“...Every day people will remember that they could be receiving their pension but are not getting it because of this bad government,” referring to how some people were likely to perceive Putin’s administration.
SHIFTING AGENDA
A survey conducted by FOM before Russia’s World Cup exit showed Putin’s approval rating down six points at 75 percent. Another by state pollster VTsIOM showed a five percentage point drop.
The World Cup took some of the sting out of that unpopularity. A survey conducted by the independent Levada Center before Russia were eliminated showed the competition was occupying Russians’ thoughts more than the pension plan.
Levada Center sociologist Stepan Goncharov said this situation would now change.
“It’s fair to say that the issue of pension reforms will return to the top (of the agenda) after the end of the tournament,” he said.
The extent of popular outrage at the plan, which aims to ease pressure on state coffers from an ageing population and a struggling economy further weakened by sanctions, would depend on what the government did next, he said.
A final decision on what form it will take is expected in autumn.
Thousands of Russians protested this month against the planned rise in the retirement age, but there were no demonstrations in World Cup host cities because of security restrictions in place during the tournament.
The Kremlin this week shrugged off the idea it might face greater public pressure over the reforms once the World Cup ended.
“It is the job of experts to reach these conclusions,” Kremlin spokesman Dmitry Peskov said. “Let them do that.”

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  #304  
Old Yesterday, 02:57 PM
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Mary Pat Campbell
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RUSSIA

https://www.bloomberg.com/news/artic...-pensions-ploy

Quote:
Putin’s Silence Unnerves Russia After ‘Panic’ Over Pension Plan
Spoiler:
Russia’s attempt to roll out a proposal to increase the pension age under the cover of the World Cup has triggered the worst tumult President Vladimir Putin has faced at home in years, fueling speculation the Kremlin might soften a reform that’s crucial to righting public finances.

A decade in the making but unveiled hours before the Russian national team’s opening game at the soccer tournament last month, it came at a time when incomes stagnate and the economic outlook remains dim. The plan to push back the time people can retire starting next year quickly spilled into protests and a steep drop in Putin’s poll ratings. Among the four parties in parliament, only the pro-Kremlin United Russia supported the legislation on Thursday.


Through it all, Putin kept mum in public, even though he approved the proposal before it went to parliament, according to two officials familiar with the deliberations. Authorities knew that the reform, while seen as inevitable, would be a tough sell, they said. But Putin’s public silence amid the signs of popular opposition has sown uncertainty about the Kremlin’s plans, even within the government, these people said, speaking on condition of anonymity to discuss confidential deliberations.

Lawmakers in Moscow approved the bill in first reading and also extended the period of deliberation by a month until Sept. 24. While that’s leaving the ball in Putin’s court, the president is only likely to speak up before regional elections in September, according to Evgeny Gontmakher, a former government official.

“A certain panic has set in among the government ranks-- evidently they didn’t expect such reaction,” said Gontmakher, who’s also a management board member at Moscow’s Institute of Contemporary Development. “I don’t rule out some watering down.”

Confidence Broken
Putin is losing trust of Russians after plan to raise pension age


Source: polling company VTsIOM

Despite reports of worry in the Kremlin, Russia’s government has tried to stay on message. Finance Minister Anton Siluanov has insisted there will be no change to the parameters of the overhaul.

But in a sign of a rift among lawmakers, 104 members of the lower house of parliament opposed the bill on Thursday, with 328 votes in favor. Several United Russia lawmakers were absent for reasons ranging from health problems to travel, and one cast a ballot against, according to the Vedomosti daily.

The proposal has rankled Russians because life expectancy remains so low that it would allow for too few years of retirement. Life expectancy is currently under 68 for men and below 78 for women. Meanwhile, poor job prospects could leave many older people unemployed.

According to an analysis by Alfa-Bank, international experience shows that governments pre-announce pension reforms by an average of five years, introducing them at moments of faster economic growth and exposing a smaller share of the population.

Russia’s Reckoning
Putin’s re-election to a record fourth term in March elections provided an opening for a decision that Russia had long dreaded. It has one of the lowest retirement ages in the developed world, unchanged since 1932, leaving the government to contend with growing expenses as the population shrinks. Women can stop work at 55 and men at 60.

Under the proposal, the retirement age will rise gradually, reaching 65 for men by 2028 for men and 63 for women by 2034. To sweeten the offer, the cabinet has suggested raising the average monthly pension.

As a result, the number of retirees is projected to fall by almost 14 percent to 31 million by 2034, with Alfa-Bank estimating that expenditures for the state pension fund could drop by about 300 billion rubles ($4.8 billion) every two years. The changes could add about 0.2 percentage point to potential economic growth each year, Bloomberg Economics estimates.

Backlash Builds
Still, the public fallout has been swift. Confidence among Russians in Putin fell below 38 percent in the first two weeks of July, the lowest level since December 2011, according to state-run polling company VTsIOM. Another recent survey found that 80 percent oppose the plans, with 43 percent of respondents saying they’d join any local protests against them if they take place.

Another point of contention is that for now it excludes changes in spacial benefits for the military and law enforcement that allow veterans to retire early.

As for the ill-timed rollout, the finance minister said it was “pure coincidence” that the announcement came on the opening day of the World Cup.
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