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ARCHIVE
The Status of Global Retirement Savings: Taking Stock, Moving Forward
By Dan Waters
December 20, 2013
Around the world, as systems for building retirement resources come under increasing pressure, countries of every size and economic situation are facing long-term savings challenges. To meet these challenges, it is critical that pension industry experts, policymakers, and fund industry representatives learn from one another and share solutions that put the needs of savers first.
This is why ICI Global hosted the Global Retirement Savings Conference: The Role of Investment Funds on 26–27 June 2013 in Hong Kong.
We organized the conference to:
- Foster an international dialogue about the long-term savings issues facing jurisdictions worldwide
- Examine the rise and evolution of defined contribution (DC) systems in response to those issues
- Explore how investment funds are uniquely positioned to serve investors in such systems
More than 100 people representing 13 countries attended the event, including fund industry representatives, world-renowned industry experts, representatives of media outlets, and key government officials and regulators. The ideas and insights that emerged from these different panels and discussions are documented in a newly-issued report summarizing the discussion, titled Insights from the Global Retirement Savings Conference.
Despite the fact that current DC systems vary from country to country—which is to be expected, given that each country has its own unique history, institutions, characteristics, and needs—during the conference it became obvious that many countries are looking toward DC systems to help address their retirement challenges.
Over the course of the two-day event, which featured three keynote speakers and four panels of international experts, five key questions emerged that countries around the world are asking when considering retirement challenges:
| 1. | When thinking about retirement and the length of time in retirement, how are countries and individuals grappling with the adequacy of benefits and sustainability of systems? |
| 2. | Should the retirement system redistribute resources? What is the proper balance between policies that encourage or even require individuals to set aside resources for their own use in retirement, and policies that redistribute resources to individuals in greatest need (either from current workers to current retirees or from higher-earning workers to lower-earning workers)? |
| 3. | What role do investment funds—such as registered funds in the United States, UCITS funds in Europe, or other similar funds throughout the world—play in DC systems today? What role could they play in the future? |
| 4. | Should the components of a national retirement system be completely mandatory, completely voluntary, or a mix of both? |
| 5. | To the extent that a retirement system allows individual choice, what policies should be pursued to increase financial literacy? |
There were no single, global answers to these questions, because governments, financial services, companies, and individuals are taking a variety of approaches to long-term savings challenges. This adaptability and diversity of responses is extremely important—and the flexibility offered by DC plans makes it easier to create a tailored, culturally-specific response.
ICI Global is committed to advancing the dialogue about how to improve retirement security worldwide. Insights from the Global Retirement Savings Conference offers perspectives on how different countries are responding to the saving challenge, assesses trends across countries, and discusses proposals for change going forward. Addressing global retirement savings issues is a daunting challenge, but my hope is that the information shared at this groundbreaking conference will help stakeholders take the next steps toward meeting that challenge.
Dan Waters is the managing director of ICI Global.
TOPICS: Retirement PolicyRetirement ResearchICI GlobalEventsInternational
America’s Retirement System Is Strong
By Sarah Holden
December 18, 2013
One year ago, ICI released its landmark study, The Success of the U.S. Retirement System, a compilation of research from a wide range of sources, which found that the country’s retirement system is fostering economic security in retirement for Americans across all income levels.
TOPICS: Mutual FundTaxesSavingsRetirement Policy401(k)ShareholderInvestment Education
ICI’s Guide to Avoiding a Common 401(k) Tax Trap
By Mike McNamee
December 9, 2013
A tax trap for retirement savings is catching many smart people unaware. If allowed to go unchecked, it could harm the retirement savings of millions of Americans. A columnist for the Washington Post was just the latest in a long list of victims.
TOPICS: Mutual FundTaxesSavings401(k)Retirement PolicyShareholderInvestment Education
‘Sponsor Support’ for Money Market Funds Is Old—and Overblown—News
By Mike McNamee
October 21, 2013
A story in the October 21 issue of the Financial Times (“Almost 20 money market funds bailed out”; subscription required) takes old numbers and tries to present them as news.
TOPICS: Financial MarketsMoney Market FundsFund Regulation
Money Market Funds and the Debt Ceiling: What Do We Know?
By Brian Reid
October 14, 2013
As the U.S. Treasury reaches the limits of its borrowing authority this week, markets and the media are focusing on the risk that the United States will default on its debt and fail to pay interest or principal on maturing Treasury securities, perhaps before the end of October.
TOPICS: Federal ReserveBondsTreasuryFinancial MarketsMoney Market FundsBond FundGovernment Affairs
Yes, DC Follies Hurt Retirement Savers—But Let’s Not Overstate
By Brian Reid
October 10, 2013
“Debt ceiling follies” certainly do put retirement savers and their assets at risk. On that, ICI agrees with a recent Washington Post blog.
TOPICS: Mutual FundSavings401(k)Financial MarketsRetirement Research
Revenue Estimates of Restricting Tax Deferral: It Ain’t Necessarily So
By Peter Brady
September 20, 2013
Fifth in a series of posts about retirement plans and the policy proposals surrounding them.
In previous Viewpoints posts, I explained that retirement contributions are neither tax deductions nor tax exclusions, but rather are tax deferrals. I also explained why, in my opinion, the two most prominent proposals to restrict qualified deferred compensation are flawed (post three and post four).
TOPICS: Mutual FundTaxesSavingsRetirement Policy401(k)ShareholderInvestment Education
Tax Reforms Should Not Favor DB Plans over DC Plans
By Peter Brady
September 19, 2013
Fourth in a series of posts about retirement plans and the policy proposals surrounding them.
In The Tax Benefits and Revenue Costs of Tax Deferral and in two previous Viewpoints posts (post one and post two), I explained the benefits that workers get from deferring tax on compensation set aside for retirement.
TOPICS: Mutual FundTaxesSavingsRetirement Policy401(k)ShareholderInvestment Education
Getting the Facts Right on Money Market Funds
By Paul Schott Stevens
September 18, 2013
This week, I testified before Congress at a hearing on the issue of money market funds and recent regulatory proposals from the Securities and Exchange Commission (SEC) that would amend the rules governing these funds.
The hearing provided an excellent opportunity to continue to educate Congress on the benefits that money market funds bring to investors and to the economy as a whole. In my testimony, I emphasized the Institute’s views on making sure that regulatory proposals do not upset the crucial role that money market funds play.
TOPICS: TreasuryFinancial MarketsMoney Market FundsGovernment Affairs
A ‘Modest’ Proposal That Isn’t: Limiting the Up-Front Benefits of Retirement Contributions
By Peter Brady
September 18, 2013
Third in a series of posts about retirement plans and the policy proposals surrounding them.
In two previous Viewpoints posts (post one and post two), I explained the benefits that workers get from deferring tax on compensation set aside for retirement.
TOPICS: Mutual FundTaxesSavings401(k)Retirement PolicyShareholderInvestment Education
Marginal Tax Rates and the Benefits of Tax Deferral
By Peter Brady
September 17, 2013
Second in a series of posts about retirement plans and the policy proposals surrounding them.
In a previous Viewpoints post, I discussed the difference between tax deferral—the tax treatment applied to retirement savings—and tax deductions and exclusions, such as the mortgage interest deduction or the exclusion of employer-paid health insurance premiums from income. The difference is often overlooked or misunderstood, leading to inaccurate analysis and harmful policy proposals.
TOPICS: Mutual FundTaxesSavings401(k)Retirement PolicyShareholderInvestment Education
Retirement Plan Contributions Are Tax-Deferred—Not Tax-Free
By Peter Brady
September 16, 2013
First in a series of posts about retirement plans and the policy proposals surrounding them.
In today’s fiscal and political climate, taxes are never far from politicians’ minds. Whether to achieve comprehensive tax reform or to raise revenue to meet budget deficits, members of Congress are now considering changes to a range of tax code provisions—including those governing retirement policy. Any comprehensive effort to address fiscal policy or tax reform should examine every option, but some discussions of retirement policy have been misguided. The tax treatment of retirement savings—tax deferral— too often has been lumped together with tax deductions (such as the deduction from income of mortgage interest expense) and tax exclusions (such as the exclusion from income of employer-provided health insurance premiums).
TOPICS: Mutual FundTaxesSavingsRetirement Policy401(k)ShareholderInvestment Education
A Step in the Right Direction on FTTs
By Keith Lawson
September 10, 2013
In a noteworthy development for anyone following the debate around financial transaction taxes (FTTs), the Council of the European Union Legal Service has issued a legal opinion regarding the FTT proposal under consideration by some EU member countries.
TOPICS: TaxesICI Global
CAP Claims About the 401(k) System Are Misguided
By Paul Schott Stevens
September 4, 2013
The concerns of the Center for American Progress about the 401(k) system (covered August 20 in “A Better Way to Save for Retirement?”) are mistaken.
TOPICS: Savings401(k)Retirement PolicyRetirement Research
ICI Responds to CFTC’s Adoption of Harmonization Rules
By Ianthe Zabel
August 14, 2013
ICI issued the following statement about the Commodity Futures Trading Commission’s (CFTC) adoption of harmonization rules related to Rule 4.5, which governs registration of commodity pool operators.
TOPICS: Commodity Investments
Get a Closer Look at Closed-End Funds
By Daniel Schrass
July 30, 2013
ICI has recently updated several of its key closed-end funds resources.
TOPICS: Investor ResearchInvestment Education
Check the Facts: Funds Engage Actively on Corporate Governance
By Ianthé Zabel
July 19, 2013
ICI president and CEO Paul Schott Stevens recently sent the following letter to the New York Times:
Every mutual fund or other registered investment company is required by law to cast votes on proxy proposals in the interests of the fund and its investors. Generally, funds interpret this to mean that they should support proposals that will promote good corporate governance and increase the value of the funds’ investments, carefully weighing shareholder interests and fund objectives.
TOPICS: Fund Regulation
Key Points to Remember on Fund Fees
By Sean Collins and Bob Grohowski
July 12, 2013
Over the past two decades, investors have paid less and less to own shares of mutual funds.
Bond Fund Flows: A Little Perspective on the Big Bond Market
By Brian Reid
July 3, 2013
The sharp run-up in interest rates since late April has caused many bond funds to experience their first losses in several years.
TOPICS: BondsFinancial Markets
Featured Chart: 401(k) Participants Hold Lower-Cost Mutual Funds
By Sarah A. Holden
June 14, 2013
One key takeaway from ICI’s recent paper, The Economics of Providing 401(k) Plans: Services, Fees, and Expenses, 2012, is that 401(k) investors in mutual funds tend to hold lower-cost funds with below-average portfolio turnover.
TOPICS: Retirement Research
Fact Checking the Media on Money Market Funds
By Mike McNamee
June 7, 2013
The media has heavily covered the unanimous vote by the Securities and Exchange Commission (SEC) to proceed with another round of regulatory changes for money market funds. In digesting this coverage, readers and journalists alike should make sure they have solid facts about money market funds. They also should be on guard for errors and omissions that tend to recur in stories and commentary on this issue.
TOPICS: Money Market Funds
On Money Market Funds, Financial Times Column Gets Recent History Wrong
By Paul Schott Stevens
June 6, 2013
John Authers’s recent Financial Times column (“Time to Throw Some Light on Shadow Banking”) provides an incomplete view of the recent history of U.S. money market funds and regulatory action around these funds. Readers need more facts.
TOPICS: Money Market Funds
Navigating a Changed—and Global—Industry
By Jeanne C. Arnold
May 23, 2013
Navigating the ever-changing landscape and increasingly global nature of the fund industry took center stage during several panels at ICI’s 55th General Member Meeting (GMM).
TOPICS: EventsCybersecurityGMMInternational
U.S. Could Quickly Solve Its Budgetary Problems, Say Former Senators
By Todd Bernhardt
May 20, 2013
The United States is tantalizingly close to solving its budgetary problems, according to former U.S. senators Kent Conrad (D-ND) and Judd Gregg (R-NH).
FASB Proposal to Change Accounting for Investments in Funds
By Gregory Smith
May 17, 2013
The Financial Accounting Standards Board (FASB) recently released a proposal that will change how corporate investors in funds report changes in the fair value of their investments in earnings.
TOPICS: Operations and Technology
GMM Panelists Discuss Retirement Savings and Financial Education
By Miriam Bridges
May 17, 2013
Americans need greater access to savings vehicles and better financial education to help ensure that they use them effectively, fund industry experts told attendees at the 55th Annual General Membership Meeting.
TOPICS: SavingsEventsGMMInvestment Education
In Case You Missed It: “A Three-Step Approach to Global Retirement Challenges”
By Stephanie Ortbals-Tibbs
May 8, 2013
Investment & Pensions Asia has just posted a commentary from Dan Waters, ICI Global’s managing director.
TOPICS: Retirement PolicyICI Global
GMM Panelists Share Tips on Strengthening Cybersecurity
By Andrew Gillies
May 7, 2013
Cybersecurity gained prominence as a topic of discussion at ICI’s General Membership Meeting (GMM), held last week in Washington, DC. “Hugely important,” said Mary John Miller, the Treasury Department’s under secretary for domestic finance, in her GMM remarks.
TOPICS: EventsCybersecurityGMM
Operations and Technology Leadership Roundtable
By Andrew Gillies
May 6, 2013
Superstorm Sandy and the April 15 terrorist attack in Boston rattled assumptions and recalibrated thinking about disaster management, agreed panelists at the Leadership Roundtable of ICI’s 2013 Operations and Technology Conference on May 2 in Washington.
TOPICS: Events
In Case You Missed It: Chairman White’s GMM Speech
By Mike McNamee
May 3, 2013
The Securities and Exchange Commission has posted Chairman Mary Jo White’s address to ICI’s 55th General Membership Meeting.
TOPICS: ICI GlobalEvents
SEC Is Integrating Itself into the Global Financial System, Chairman White Tells ICI Conference
By Rachel McTague
May 3, 2013
In a speech at ICI’s General Membership Meeting today, Securities and Exchange Commission (SEC) Chairman Mary Jo White highlighted the myriad ways that the SEC, in light of an increasingly global regulatory environment, pursues its mission to protect U.S. investors and markets and to promote capital formation.
Luncheon with Keynote Speaker: Lloyd C. Blankfein in Conversation with Paul Schott Stevens
By Andrew T. Gillies
May 2, 2013
If Lloyd Blankfein were in charge of the U.S. economy, what would he be most afraid of?
GMM Policy Forum
By Andrew T. Gillies
May 1, 2013
Addressing America’s fiscal challenges will require both raising revenue and cutting government spending, said Mary John Miller, the U.S. Treasury Department’s Under Secretary for Domestic Finance, at the Policy Forum of ICI’s 55th annual General Membership Meeting (GMM).
David Silver: An Appreciation
By Paul Schott Stevens
May 1, 2013
With the passing of David Silver, the fund industry has lost a great friend and a great leader.
TOPICS: NONE
IMF Analysis Ignores 2010 Money Market Fund Reforms and Exaggerates Run Risk
By Sean Collins and Chris Plantier
April 26, 2013
The Securities and Exchanges Commission’s comprehensive 2010 reforms for money market funds are a proven success. As ICI research has shown, the reforms strengthened the funds and enhanced financial stability.
TOPICS: Financial MarketsMoney Market Funds
Americans Support Their 401(k)s
By Mike McNamee
April 25, 2013
It’s pretty obvious to anyone who reads ICI Viewpoints that we believe 401(k) plans are a successful part of an overall retirement system that is working for working—and retired!—Americans. But we’re far from the only ones who think so. Surveys show that Americans share this confidence in the 401(k) and support the key features of 401(k)s and other defined contribution (DC) plans.
The Facts on Fees and 401(k)s
By Mike McNamee
April 23, 2013
Consistently falling prices in a marketplace are usually a sign of competition and innovation.
TOPICS: 401(k)Retirement PolicyRetirement Research
FTT Would Shut Financial Institutions in Participating Countries Out of Repo Market
By Shelly Antoniewicz and Peter Brady
April 22, 2013
The European Commission has proposed imposing a 0.1 percent (10 basis points) levy on financial transactions. As ICI has detailed, this financial transaction tax (FTT) would have a host of negative consequences, including harm to investors and extraterritoriality.
TOPICS: TaxesICI GlobalMoney Market Funds
The Facts on Limited Access to Retirement Funds Before Retirement
By Mike McNamee
April 22, 2013
One of the many strengths of the 401(k) system is its flexibility. Policymakers have built into 401(k) plans a careful mix of incentives that help workers save and preserve their savings for retirement—while still allowing limited access to their funds, in case of need, through hardship withdrawals and loans.
401(k) Plans Work in a Balanced Approach to Retirement Security
By Mike McNamee
April 19, 2013
What’s the outlook for American workers looking forward to retirement?
TOPICS: 401(k)Retirement PolicyRetirement Research
No Accident: The Strengths of the 401(k) System
By Mike McNamee
April 18, 2013
Americans have saved $5.1 trillion dollars in 401(k) and other defined contribution (DC) retirement plans—plus another $5.4 in individual retirement accounts (IRAs) that are funded largely by assets rolled over from DC and other employer retirement plans.
TOPICS: 401(k)Retirement PolicyRetirement Research
IRA Rollovers Serve Investors Well
By David Abbey and Sarah Holden
April 12, 2013
The U.S. Department of Labor (DOL) is preparing to reintroduce its controversial proposal to revise the long-standing definition of “fiduciary” under the Employee Retirement Income Security Act (ERISA).
The Extraordinarily Extraterritorial Proposal to Tax Global Financial Transactions
By Keith Lawson
April 10, 2013
The financial transaction tax (FTT) being considered by several European countries would have an extraordinary extraterritorial effect.
TOPICS: TaxesICI Global
Treasury’s Miller, Goldman’s Blankfein to Share Insights at ICI’s 2013 GMM
By Sandra J. West
April 4, 2013
For decades, fund executives have come to ICI’s General Membership Meeting (GMM) to get an in-depth understanding of the policy landscape surrounding the industry.
TOPICS: Events
U.S. Prime Money Market Funds’ Eurozone Holdings Remain Low and Limited in Scope
By Emily Gallagher and Chris Plantier
March 28, 2013
Given February’s elections in Italy and recent developments in Cyprus, questions have resurfaced about the eurozone debt crisis and how it might affect the U.S. economy.
Individual Investors Will Be Harmed by Financial Transaction Taxes
By Keith Lawson
March 27, 2013
A fundamental tenet of the argument for a financial transaction taxes (FTTs) is that individuals would not be harmed.
TOPICS: TaxesICI Global
Narrowing the Focus to Prime Money Market Funds
By Brian Reid
March 25, 2013
One of ICI’s key points in our responses to recent policy proposals for money market funds is that no case can be made for applying fundamental changes to Treasury, government, and tax-exempt money market funds.
TOPICS: Financial MarketsMoney Market Funds
Eliminating Confusion in MSRB Rulemaking
By Tamara Salmon
March 8, 2013
The Municipal Securities Rulemaking Board (MSRB) has asked for input on how it can improve its approach to rulemaking. We’ve responded with several recommendations for the agency, including steps that would eliminate confusion relating to the regulation of 529 college savings plans.
TOPICS: Fund Regulation
The New York Fed’s Flawed Approach to Fixing the Money Market
By Brian Reid
March 4, 2013
William C. Dudley, president and CEO of the Federal Reserve Bank of New York, recently delivered a speech, “Fixing Wholesale Funding to Build a More Stable Financial System.” I was interested to read his remarks, as the New York Fed has been instrumental in pursuing reforms to strengthen the financial markets, particularly in the market for tri-party repurchase agreements.
TOPICS: Financial MarketsMoney Market Funds
One Size Does Not Fit All in Regulation of Financial Benchmarks
By Robert C. Grohowski, Mara Shreck, and Giles Swan
March 1, 2013
Following controversy surrounding calculation of the London Interbank Offered Rate (LIBOR), international regulators are closely scrutinizing the methodology, use, and oversight—among other issues—of financial benchmarks.
TOPICS: Fund Regulation
Money Market Funds: There Goes the Wall Street Journal Again
Paul Schott Stevens
February 21, 2013
Over the past three years, the Wall Street Journal has published six editorials on money market funds, and each has advanced more myths and distortions about these funds.
TOPICS: Money Market Funds
Extra, Extra, Read All About It: Americans Are Preparing for Retirement
Mike McNamee
February 20, 2013
Data and academic research overwhelmingly show that Americans are taking care to prepare for retirement.
TOPICS: 401(k)Retirement Research
ICI Responds to Letter on Money Market Funds from Federal Reserve Bank Presidents
Ianthé Zabel
February 12, 2013
Today, ICI made the following statement in response to a comment letter on money market fund reforms filed with the Financial Stability Oversight Council (FSOC) by the presidents of the 12 regional Federal Reserve banks.
TOPICS: Money Market Funds
Money Market Funds and the Expiration of Unlimited Deposit Insurance
By Sean Collins and Chris Plantier
January 28, 2013
As stipulated in the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Federal Deposit Insurance Corporation’s unlimited insurance coverage on non-interest bearing transaction accounts, also known as the Transaction Account Guarantee (TAG), expired on December 31, 2012.
In Case You Missed It: “On Retirement Policy, Don't Mess with Success”
By Ianthé Zabel
January 28, 2013
In an op-ed for InvestmentNews, ICI President and CEO Paul Schott Stevens explains the importance of preserving incentives that help Americans save for retirement.
TOPICS: Retirement Policy401(k)
A Comprehensive View on How to Preserve Money Market Funds and Further Their Stability
By Paul Schott Stevens
January 25, 2013
Since the financial crisis, ICI has supported exploring reasonable options to make money market funds even more resilient.
TOPICS: Money Market Funds
ICI Global Welcomes Improvements in Final FATCA Regulations
By Ianthe Zabel
January 18, 2013
TOPICS: TaxesInternational
Securities Lending and Repos: FSB Intrudes on Areas Best Left to National Regulators, Market Forces
By Robert C. Grohowski and Giles Swan
January 17, 2013
The Financial Stability Board (FSB), the international body established by the G20 to promote coordination among authorities responsible for financial stability, has made a number of recommendations toward creating a global policy framework for the securities lending and repurchase agreement (repo) markets.
TOPICS: ICI GlobalFund Regulation
The Reasonable Balance of the 2010 Reforms for Money Market Funds
By Sean Collins and Chris Plantier
January 15, 2013
Financial intermediaries—banks, hedge funds, insurance companies, investment companies, and private equity companies—exist to bring together those who have excess funds with those who need funds. This process naturally entails risk.
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