The Weekly Wrap: September 2

Chile pension protests are latest sign of global disillusionment 

FT: Hundreds of thousands of Chileans protested against the system of private pensions, the AFP, in Santiago recently. The programme, which has been praised and copied since its introduction in 1981, is proving unable to ensure security in old age: some people are left without a pension, while those with one face a future of meagre income – a situation that is becoming more common the world over.

Pensions can generate 24% more income than property

FTAdviser: Investment firm Architas has calculated that if the cost of an average house of £204,238 were instead invested in a pension, their pot could grow to £853,698 over 25 years. Chief economist at the Bank of England Andy Haldane was recently criticised for saying he would invest in a property over a pension, with experts asserting that bricks and mortar are not the best option in retirement planning.

Interest wanes in multi-asset funds

MandateWire: Expressions of interest in multi-asset strategies fell to nine in the first half of this year, from 16 in the second half of 2015. Multi-asset mandate awards have more than halved, with asset inflows from those awarded also falling, as institutional investors focused on liability-driven investment and single asset classes. Multi-asset credit managers won 44 per cent of all multi-asset mandates awarded.

Manufacturer warns pensions deficit will hit dividend

FT: Plastics manufacturer Carclo has said the widening funding gap for its defined benefit scheme is likely to affect its ability to pay a final dividend of 1.95p per share in October. “If the corporate bond yield remains at its current low level then this will result in a significant increase in the group’s pension deficit as at September 30 2016,” said Carclo in a trading update.

Advisers report increase in DB transfer inquiries

FTAdviser: Of 107 advisers surveyed by Retirement Advantage, 40 per cent said they had seen a "significant" rise in interest in DB transfers from the previous year. Andrew Tully, pensions technical director at Retirement Advantage, said many people are cashing out, as the pension freedoms introduced "a number of factors which could indicate a transfer may be suitable".

Most read on pensions-expert this week

CPI and RPI gap at largest for five years as schemes eye law change
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Bushfire of pension discrimination cases spreads to firefighters
How should schemes use mortality studies
Innovation in the bulk annuity market

Social media comment of the week

Carlco, a UK manufacturer, is warning shareholders they may not benefit from a final dividend due to Brexit blow-out of the pension deficit.

— Josephine Cumbo (@JosephineCumbo) August 31, 2016