Briefly:

China appears be showing early signs of a bull market, according to a recent report from CIBC World Markets. Elsewhere in East Asia factories are being re-ignited back to life. In Japan, production in March rose by 1.6% — the first material gain in 10 months. Estimates for April and May see monthly increases of […]

By Staff | May 11, 2009 | Last updated on May 11, 2009
4 min read
  • Women need to save more retirement assets than men because they live longer. But, acquiring sufficient assets is more difficult because women still have lower wages and less access to retirement plans during their working years as compared to men. A woman with a salary of $50,000 must save $1,000 more per year than her male counterpart to achieve equitable retirement income. Yet according to a 2007 study, full-time female workers made just 76.2% of their male counterparts’ wages — that means less money for savings.
  • The study also indicates that women are more likely to live above the poverty line in retirement when they have income from pensions. But, just 23.3% of women have their own pension as compared to 42% of men.
  • Defined benefit (DB) pension plans provide benefits and protections that are especially important for women — spousal protections and a lifetime income stream that cannot be outlived. However, DB plans are on a decline.

(05/11/09)

Advisor.ca staff

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.

Previous Brieflies this week: | MON | TUE | WED | THU |

China appears be showing early signs of a bull market, according to a recent report from CIBC World Markets.

Elsewhere in East Asia factories are being re-ignited back to life. In Japan, production in March rose by 1.6% — the first material gain in 10 months. Estimates for April and May see monthly increases of 4.3% and 6.1%, respectively.

Meanwhile, industrial production in Korea posted a 4.8% monthly gain in March on top of a 7.1% rise in February.

Avery Shenfeld, CIBC chief economist, said that Canadians can benefit from the early recovery in East Asia by increasing their exposure to the sectors that tend to be early movers in an industrial recovery: non-energy commodities. Assets such as base metals are needed in the early parts of a recovery because firms need to rebuild their inventories to re-start production lines.

Increased spending on infrastructure is also contributing to the demand for base metals, says Shenfeld. “China’s $586 billion stimulus package is focused on housing and infrastructure, including railroad and grid expansion — highly metal-intensive areas of activity.”

• • •

Funded status of large U.S. plans recovering

Pension plan deficits shrank in April for the second successive month. According to the Mercer analysis, the funded status of pension plans of S&P 1500 companies improved by $48 billion in April, which followed the $158 billion improvement in March. As a result, the estimated aggregate deficit of pension plans sponsored by S&P 1500 companies was $167 billion at the end of April, down from $215 billion at the end of March and $409 billion at the end of December 2008.

“Through April, equity markets continued to improve, increasing the value of plan assets. Corporate bond yields decreased slightly, which very slightly increased the value of plan liabilities. The net result was another increase in funded status,” said Adrian Hartshorn, a member of Mercer’s Financial Strategy Group, which helps companies manage financial risk in their retirement programs.

According to Hartshorn, “The improvement in funded status is welcome news for plan sponsors and participants. However, plan sponsors need to be in a position to take advantage of any changes in the market. This means having a clear set of funding and investment objectives for the plan which allow the sponsor and the fiduciary to fulfill their long-term goals. Sponsors also need to make sure they have the governance structure in place to implement any changes, potentially within a short time frame so as not to miss market opportunities.”

• • •

SEC slaps hedge fund manager with massive fine

The Securities and Exchange Commission has announced that Michael Lauer, the head of two Connecticut hedge funds, has been ordered to pay more than $64 million to settle charges of defrauding investors of more than $500 million by manipulating securities prices and lying about the holdings of his funds.

Lauer, of Conn.-based Lancer Management Group and Lancer Management Group II, must pay more than $46 million to compensate for ill-gotten gains, in addition to more than $18 million in interest.

Lauer has been criminally indicted in the case and his trial is scheduled for next year. This order from the U.S. District Court for the Southern District of Florida gives the SEC 30 days to recommend a penalty that he should pay in addition to disgorgement and interest.

• • •

Women face greater risk of retirement insecurity

According to research from the National Institute on Retirement Security (NIRS), a strong gender gap still exists when it comes to retirement security.

“Women still earn less, have less to save, and are less likely to have workplace retirement plans,” says Ilana Boivie, NIRS policy analyst and author of the research brief.

The research paper entitled Shattering the Retirement Glass Ceiling: Women Need a Three-Legged Stool, recommends that to reduce retirement insecurity, women need a variety of income sources: a traditional pension, supplemental 401(k)-type individual savings and Social Security.

The research finds achieving retirement security often is more challenging for women than men and includes the following key findings:

  • Women need to save more retirement assets than men because they live longer. But, acquiring sufficient assets is more difficult because women still have lower wages and less access to retirement plans during their working years as compared to men. A woman with a salary of $50,000 must save $1,000 more per year than her male counterpart to achieve equitable retirement income. Yet according to a 2007 study, full-time female workers made just 76.2% of their male counterparts’ wages — that means less money for savings.
  • The study also indicates that women are more likely to live above the poverty line in retirement when they have income from pensions. But, just 23.3% of women have their own pension as compared to 42% of men.
  • Defined benefit (DB) pension plans provide benefits and protections that are especially important for women — spousal protections and a lifetime income stream that cannot be outlived. However, DB plans are on a decline.

(05/11/09)

Previous Brieflies this week: | MON | TUE | WED | THU |

China appears be showing early signs of a bull market, according to a recent report from CIBC World Markets.

Elsewhere in East Asia factories are being re-ignited back to life. In Japan, production in March rose by 1.6% — the first material gain in 10 months. Estimates for April and May see monthly increases of 4.3% and 6.1%, respectively.

Meanwhile, industrial production in Korea posted a 4.8% monthly gain in March on top of a 7.1% rise in February.

Avery Shenfeld, CIBC chief economist, said that Canadians can benefit from the early recovery in East Asia by increasing their exposure to the sectors that tend to be early movers in an industrial recovery: non-energy commodities. Assets such as base metals are needed in the early parts of a recovery because firms need to rebuild their inventories to re-start production lines.

Increased spending on infrastructure is also contributing to the demand for base metals, says Shenfeld. “China’s $586 billion stimulus package is focused on housing and infrastructure, including railroad and grid expansion — highly metal-intensive areas of activity.”

• • •

Funded status of large U.S. plans recovering

Pension plan deficits shrank in April for the second successive month. According to the Mercer analysis, the funded status of pension plans of S&P 1500 companies improved by $48 billion in April, which followed the $158 billion improvement in March. As a result, the estimated aggregate deficit of pension plans sponsored by S&P 1500 companies was $167 billion at the end of April, down from $215 billion at the end of March and $409 billion at the end of December 2008.

“Through April, equity markets continued to improve, increasing the value of plan assets. Corporate bond yields decreased slightly, which very slightly increased the value of plan liabilities. The net result was another increase in funded status,” said Adrian Hartshorn, a member of Mercer’s Financial Strategy Group, which helps companies manage financial risk in their retirement programs.

According to Hartshorn, “The improvement in funded status is welcome news for plan sponsors and participants. However, plan sponsors need to be in a position to take advantage of any changes in the market. This means having a clear set of funding and investment objectives for the plan which allow the sponsor and the fiduciary to fulfill their long-term goals. Sponsors also need to make sure they have the governance structure in place to implement any changes, potentially within a short time frame so as not to miss market opportunities.”

• • •

SEC slaps hedge fund manager with massive fine

The Securities and Exchange Commission has announced that Michael Lauer, the head of two Connecticut hedge funds, has been ordered to pay more than $64 million to settle charges of defrauding investors of more than $500 million by manipulating securities prices and lying about the holdings of his funds.

Lauer, of Conn.-based Lancer Management Group and Lancer Management Group II, must pay more than $46 million to compensate for ill-gotten gains, in addition to more than $18 million in interest.

Lauer has been criminally indicted in the case and his trial is scheduled for next year. This order from the U.S. District Court for the Southern District of Florida gives the SEC 30 days to recommend a penalty that he should pay in addition to disgorgement and interest.

• • •

Women face greater risk of retirement insecurity

According to research from the National Institute on Retirement Security (NIRS), a strong gender gap still exists when it comes to retirement security.

“Women still earn less, have less to save, and are less likely to have workplace retirement plans,” says Ilana Boivie, NIRS policy analyst and author of the research brief.

The research paper entitled Shattering the Retirement Glass Ceiling: Women Need a Three-Legged Stool, recommends that to reduce retirement insecurity, women need a variety of income sources: a traditional pension, supplemental 401(k)-type individual savings and Social Security.

The research finds achieving retirement security often is more challenging for women than men and includes the following key findings:

  • Women need to save more retirement assets than men because they live longer. But, acquiring sufficient assets is more difficult because women still have lower wages and less access to retirement plans during their working years as compared to men. A woman with a salary of $50,000 must save $1,000 more per year than her male counterpart to achieve equitable retirement income. Yet according to a 2007 study, full-time female workers made just 76.2% of their male counterparts’ wages — that means less money for savings.
  • The study also indicates that women are more likely to live above the poverty line in retirement when they have income from pensions. But, just 23.3% of women have their own pension as compared to 42% of men.
  • Defined benefit (DB) pension plans provide benefits and protections that are especially important for women — spousal protections and a lifetime income stream that cannot be outlived. However, DB plans are on a decline.

(05/11/09)