Analysis: How NEST wants to shape the future of retirement
NEST’s proposed system is based on six principles drawn from a survey its membership earlier this year. This showed savers prioritise inflation-protected income, guaranteed income until death, protection for market falls and access to cash lump sums. NEST says its new system, in theory, meets these requirements.A new drawdown investment approachWhile NEST isn’t looking to change the way it builds up a member’s savings, the design of its income-drawdown fund’s suitability is important.A concern for the scheme with offering a drawdown option is sequential risk – the risk of a market downturn in the early years damaging the fund’s sustainability. The risk, it says, can be managed in several ways. NEST says whatever approach it uses, it recognises there is no silver bullet and that a variety of techniques will be necessary. To manage sequential risk, the provider intends to use volatility management overlays – where it sells futures contracts as volatility in risk assets increases, with the aim of protecting the fund from excessive market downturns. Given that it expects to provide around 4% as annual income, it will also invest in cash flow assets, such as property and corporate debt. The added advantage of this, NEST says, is that it will not be required to sell assets to meet cash flows, should assets prices fall.Any approach, it says, should reduce systemic risk of being forced to sell assets. It should also ensure enough capacity to invest in desired assets and that there is no systematic bias towards risky or overvalued assets – in a nod towards alternative beta strategies akin to those used in its accumulation portfolio.NEST has been busy modelling, and – given that the aim is to provide a steady retirement income while minimising the probability that money runs out before the secured income kicks in – the fund should carry what it calls a low ‘risk of ruin’.On the basis of drawing down 4% every year, NEST modelled three investment risk options and calculated probabilities of exhausting a member’s savings – assumed to be £100,000 (€142,000) – within 20 years. A low-risk portfolio of mainly fixed income would carry a 25% chance of running out of money before the deferred annuity came into effect, and roughly six months before hand. However, NEST says its optimal medium-risk portfolio was much more balanced. The option, invested in fixed income, property and equities, carries only a 2% chance of not making the assumed 20-year period between retirement and the deferred annuity. Its higher-risk portfolio carries a 5% chance, but NEST said this could happen within 10 years. This was modelled on a sequence of market crashes akin to a ‘dotcom crash’ followed immediately by a global financial crisis.NEST said its modelling suggested that any strategy would have to be prudent and include “extremely robust risk management”. On the flip side, its models show a £100,000 pot invested in the medium-risk strategy carried a nearly 17% chance of having £30,000 remaining even after 20 years of 4% withdrawal and 2% siphoned off for the annuity purchase. (see chart)#*#*Show Fullscreen*#*# After the UK government removed compulsory annuitisation for DC savers, the country’s largest provider needed to reshape its offering – blending income drawdown with a form of deferred annuity income. Taha Lokhandwala looks at the detailsThis weekend saw the publication of the National Employment Savings Trust’s (NEST) ideas on how to guide its members into a safe and secure retirement income, with the government-backed defined contribution (DC) master trust looking to adapt to a new environment where annuities are no longer the norm.As the UK’s largest auto-enrolment scheme, with 2.1m members, NEST currently has a system of target-date funds that invest expecting full cash withdrawal (given the current low pot size) or an annuity. However, after the government changed legislation this year, annuities are no longer compulsory, giving members complete freedom, and NEST – with its public service obligation – an opportunity to create a new system.The new default system will see a blend between income drawdown, a cash fund and saving towards an annuity, run simultaneously in a novel approach. At retirement, 90% of the member’s fund will transfer to the income drawdown fund and be invested in an income-generating portfolio. The monthly returns will provide a retirement income while 2% of the fund, annually, will move into another fund to purchase a deferred annuity. The remaining 10% will be moved into a cash fund for members to access as and when required, and be topped up should the income-drawdown fund provide excess returns. Source: National Employment Savings TrustChances of leftover assets in income drawdown fund after 20 years Starting pot: £100,00 Annual drawdown: 4%Despite inflation protection being such a key request from its membership, further research suggested it should be “managed but not necessarily hedged”. NEST said guaranteed inflation protection was expensive, and that investments should provide cover in most circumstances. “This does not preclude the possibility portfolios for some cohorts would have an inflation hedge, if pricing were attractive,” it says. “In general, inflation protection would be provided by property and equities.”Securing an income in later lifeIn its briefing, NEST has avoided using the terminology ‘deferred annuity’, as it currently remains agnostic on how this should be offered, citing the need for further industry input. It is currently torn between two developing ideas in the US and Australia.One is the American advanced life deferred annuity (ALDA) approach that offers members a secure income well ahead of when it is needed. Another is dividing members into cohorts in yearly or tri-annual tranches and operating a collective DC (CDC) scheme, as currently found in Australia. Annuity funds are pooled, and monthly incomes provided from premiums and investment returns.NEST’s approach of siphoning off 2% of the invested drawdown fund on an annual basis prevents members from losing a large chunk of the savings in one fell swoop. Also, by not purchasing the annuity at retirement, even if deferred for 20 years, the member can benefit from mortality credit and investment returns.NEST CIO Mark Fawcett said the design provides more flexibility because a commitment to an annuity isn’t made on day one – and, should the member decide against any form of later life income, he can choose not to. Purchasing it earlier on in retirement would be more expensive anyway, and hamper the ability to provide a monthly income from the drawdown fund that would be depleted.By this reasoning, NEST has also ruled out purchasing monthly or yearly deferred annuities – akin to the approach of Denmark’s ATP – which would offer annuity rate smoothing but also tie in a member very early on.The ALDA approach is ideal for NEST’s current assumed idea of saving for the income from 65 to 75 and then purchasing the income to kick in at 85. However, while these products survive and grow in the US, solvency requirements in the UK make this an expensive offering for insurers. Further, US insurers have much wider mortality pools given the lack of enhanced or medically underwritten annuities compared with the UK – making premiums on annuities attractive to US firms.NEST also has concerns about the CDC approach. While it would not be subject to insurance capital requirements, and therefore would be cheaper to offer, it does not guarantee an income level like an ALDA, but is rather more a ‘best efforts’ basis. While hedging could be placed in via longevity swaps to improve security, such instruments fluctuate in price and could only be added opportunistically.Fawcett says NEST has deliberately remained neutral on how to provide the ‘later-life income’, as it chooses to call it. While its overall blueprint is in place to meet member needs, much work and industry consultation is required before it can be implemented. NEST estimates the minimum requirement for this option would be around £30,000. Given that the average pot size is £200, and for those over 55 still below £1,000, the scheme has time to perfect its ideas.
Share 22 Views no discussions Sharing is caring! Tweet Share Defending Champions Sign Man X-Men remain undefeated improving record to 4-0 and remains at the top of The Domlec Premier Division.Here are the results of games played last Saturday in the Lime National Basketball League in the Domlec Premier Division and the Kubuli/Vitamalt Division 1.Game 1 – In the Kubuli/Vitamalt Division 1 between NBD Original X-Men and Maximum Supplies Tigers turned out to be a very exciting game ending in regulation tied at 45 points, allowing for a further 5 minutes in Overtime. Tigers took advantage of the X-Men tiredness to cruise to victory 59 points to 53 points. Top scoring for Tigers were Ian Brumant 22 points and Tony Lee 12 points while Omarie Williams 15 points, Damien Sorhaindo 13 points and Daryl Thomas 10 points.Game 2 – The defending champions Signman X-Men handle the much hype challenge of the former champion Gatorade Blazers in a tightly contested game on Saturday. Nail biting to the finish when the lead changed from team to team on numerous times until the closing minutes of the game when the X-Men took a 10 point lead and never relinquish. The final scores Sign Man X-Men 62 points to Gatorade Blazers 54 points, top scoring for X-Men were Peter Ricketts 18 points, Davidson Toulon 13 points and Simon Joseph 11 points while Lester Langlais 10 points, Nathan JnoJules 9 points and Javed Joseph 7 points. NewsSports Defending Champions Sign Man X-Men Remain Undefeated by: – June 7, 2011 Share By: Mickey Joseph
The Munster and Ireland wing went off injured during his team’s surprise Heineken Cup pool defeat against Edinburgh at Murrayfield last Saturday. And Munster have now confirmed the 23-year-old will be sidelined for approximately 10 weeks. Simon Zebo looks set to miss Ireland’s autumn Tests after suffering a cracked bone in his foot. Press Association
If that prognosis proves correct then Zebo, who was called up as injury cover during the British and Irish Lions’ Australia tour earlier this year, will miss Ireland’s November appointments with Samoa, Australia and New Zealand. He would also sit out at least Munster’s next three Heineken Cup games, against Gloucester on Saturday, plus December home and away games against Perpignan. Zebo suffered a foot injury during last season’s RBS 6 Nations loss at home to England, and missed the remainder of the tournament. “Simon Zebo has been ruled out of action for approximately 10 weeks following on from the injury he picked up in Saturday’s opening Heineken Cup game against Edinburgh,” read a statement on Munster’s official website. “A scan carried out earlier today has identified a crack in a bone in his left foot and Zebo will continue to wear the medical boot he was issued post-match for the next four weeks.” 
Published on February 7, 2017 at 10:18 pm Contact Connor: cgrossma@syr.edu | @connorgrossman Editor’s note: The Daily Orange was not at the Clemson game Tuesday night. Our reporters are providing coverage after watching the game at TVIn another road game coming down to the game’s final possession, Syracuse came out on top again. Tyus Battle hit a buzzer-beating 3 to give SU (16-9, 8-4 Atlantic Coast) an 82-81 win against Clemson (13-10, 3-8) at Littlejohn Arena.Here’s the best and worst from Tuesday’s game.Turning pointIn a battle of two teams on the NCAA Tournament bubble, the game came down to the final 32 seconds in a 79-79 game. The Tigers ran down the clock to seven seconds before Donte Grantham hit a contested jumper in the paint to give Clemson an 81-79 lead. Syracuse then called a timeout to draw up a play.AdvertisementThis is placeholder textOn the game’s final possession, Syracuse ran the length of the floor. John Gillon received the inbound from Tyler Lydon before streaking down the court, eventually turning and flipping the ball back to Lydon, who drove and found Tyus Battle open for a corner 3. The freshman guard hit his second shot of the night to give the Orange a clutch win.Stud: Taurean ThompsonFor much of the first half, Syracuse played like the one-dimensional offensive team that struggled through non-conference play. That meant little to no penetration, and a significant reliance on White behind the arc. Like he has most of the season, the fifth-year senior bailed out his teammates. But when Syracuse needed life in the second half, Thompson delivered the interior production SU badly needed. He scored 14 points against Clemson, all in the second half.The freshman forward scored 10 of the Orange’s first 13 points in the second stanza, many on second-chance opportunities. When Lydon missed a deep 3, Thompson tipped it back in to give Syracuse a 43-42 lead. The 6-foot-11 freshman did the same on a missed White 3 on the next possession, giving him seven straight points.Thompson’s biggest issue on Tuesday, like it has been all season, is foul trouble. He re-entered the game with five and a half minutes left, immediately laid in a basket and committed his fourth foul on his first defensive possession. That forced Boeheim to rely on Tyler Roberson, who isn’t nearly the post player Thompson is.Highlight: White’s stealWith 59 seconds to go and Syracuse trailing by two, Clemson lobbed an inbound play near midcourt. White bodied up the Tigers player and wrestled possession away. The ensuing possession ended in a Lydon foul at the rim, and he made both free throws to tie the game at 79. For a player known largely for his offensive contributions, White’s defense has been big in the Orange’s past few games.MORE COVERAGE What we learned from Syracuse’s 82-81 last-second win over ClemsonTyus Battle hits buzzer-beating 3 to give Syracuse 82-81 win over ClemsonFan reactions from Syracuse’s win over Clemson Lowlight: Roberson’s free throwsIf it feels like Roberson hasn’t made a free throw in two weeks, it’s because he hasn’t. The senior only had two attempts from the line but missed both. The last time Roberson made a free throw was against Wake Forest on Jan. 24. Since then, he’s 0-for-10. The forward’s inefficiencies from the foul line weren’t exposed on Tuesday, but Syracuse badly needed those points in a close game. It won’t be long until SU opponents start fouling Roberson in in the final minutes of close games, willing to bet games on his ability to make free throws. Comments
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Syracuse will host Albany in the 2021 season opener, the schools announced Tuesday. The date has yet to be released.Albany competes in the FCS, the tier below the FBS, where Syracuse plays, and is 2-1 in 2017. The 2021 matchup will be the first between SU and Albany. The Great Danes will also be the Orange’s second FCS opponent of the year, as SU will host Liberty on Sept. 25. Wisconsin will also travel to the Carrier Dome, SU’s other nonconference home game of the 2021 season.“This is a great matchup for college football fans in New York,” Syracuse Director of Athletics John Wildhack said in a statement. “Albany has been a competitive FCS program for a numbers of years.”Here’s the rest of the 2021 schedule, with specifics of the Atlantic Coast Conference games yet to be announced:TBD vs. AlbanyAdvertisementThis is placeholder textSept. 11 vs. WisconsinSept. 25 vs. LibertyACC home games: Boston College, Clemson, Pittsburgh, Wake ForestACC away games: Florida State, Louisville, North Carolina State, Virginia Tech Comments Facebook Twitter Google+ Published on September 19, 2017 at 12:15 pm Contact Charlie: csdistur@syr.edu | @charliedisturco
Former All Ireland winner with Wexford Ursula Jacob agrees with switching Saturday’s camogie All Ireland semi finals to Thurles to form a triple header with the All Ireland senior hurling semi final replay.The games between Galway and Kilkenny and Wexford and Cork had been scheduled for Nowlan Park but have now been moved.Cork will play Wexford at 2 while Galway meet Kilkenny at 3.45 next Saturday before Kilkenny clash with Waterford. Jacob says it’s good the double header has been moved.
A Miami bridge, which collapsed on March 15th killing six people including a Jamaican immigrant, had shown cracks from weeks before.The Miami Herald reports that documents from Florida International University show the cracks were found in late February. The structure collapsed March 15, killing six people.Photos show the cracks in a piece of a support truss on the north end of the span where the collapse began.Bridge engineers told the newspaper that the cracks suggest a problem that should have been addressed before the section that failed was moved into place. The National Transportation Safety Board is investigating the cause of the collapse which killed Jamaican Navarro ‘Varo’ Brown, 37. Brown was a bridge worker on the 950-ton span Florida International University, (FIU), pedestrian walkway at Southwest 8th Street and 109th Avenue with Structural Technologies VSL.
Khadijah Robinson, a physiotherapist, has been crowned Miss Jamaica World 2018. Robinson, held off stiff competition from 15 other ladies to walk away with the opportunity to represent Jamaica at the global pageant in Sanya, China, in December.Robinson, 23, also won sectional prizes for most photogenic, best gown and social media favorite. First runner-up was Issia Thelwell and third place went to Catherine Harris, who was also voted the most improved contestant.The Miss Jamaica World 2018 grand coronation show was held on the weekend at the Jamaica Pegasus hotel in New Kingston.
Vainglory, the mobile esports multiplayer online battle arena (“MOBA”) will have its World Championships broadcast live on GINX Esports TV. The World Championships take place between the 13th and 17th of December as they return to Singapore, the place where Vainglory’s alpha was initially launched. The tournament will see 12 teams battle it out at the Kallang Theater for the world title. The partnership with GINX will see Vainglory’s biggest tournament broadcast live on the television channel which is available in over 40 countries worldwide and in over 55,000,000 homes across the globe. Not only will the competitive action be broadcast, but GINX will also bring footage of the global unveiling of Vainglory’s five versus five mode, something that has been built up for a long, long time. “Our goal is to help esports games be more visible on TV. We are thrilled to work with Super Evil Mega Corp and give them access to the 55 million homes we are available in.” commented Michiel Bakker, CEO of GINX Esports TV.GINX are sending a team out to Singapore for the event, with presenter of #OnTheDDL Heather “Naysayerz” Dower flying out with a team to produce content around the event. There’s a lot of familiar faces on the talent lineup for the tournament, with the likes of Aaron “Medic” Chamberlain, Joseph “Munchable” Fenny, Ciernan “Excoundrel” Lowe, Dan Gaskin and Joshua “Dowsey” Dowse all familiar faces to many in the esports world.Last year at the inaugural Vainglory World Championships, North American stars TSM lost narrowly in the grand final to Phoenix Armada, losing the final game in just nine minutes. They will certainly be hoping to go one better this year but arguably the field is more competitive than ever. It’s undoubtedly set to be an intriguing contest.Esports Insider says: More good news for Vainglory, and GINX too. We look forward to watching our favourite mobile esports title on the tele – and seeing the content the team over at GINX create around it.
Ghana meet Turkey in Wednesday’s friendly with head coach Kwesi Appiah looking to give a chance to players rarely used though with an eye on next month’s 2014 FIFA World Cup Brazil qualifier.The Black Stars coach has confirmed that some regulars including captain Asamoah Gyan and Kwadwo Asamoah will not be starters in the game against the Turks in Istanbul.“At the moment, we don’t have much of a serious injury situation except that Kwadwo Asamoah had an ankle problem during his last game for Juventus. He’s been training with it and for that reason he may not start.“With Asamoah [Gyan], because of the Ramadan, Islamic fasting period, his team – Al-Ain -had some break so he just started training. So, he may also not start. They will all come on in the second half. I believe all the boys are fully prepared and we don’t have any fitness problems,” said Appiah.With a crucial World Cup qualifier to come against Zambia, Appiah is demanding focus as he fine-tunes his side for the game on September 6 in Kumasi.“We’ve done two training sessions and you can see the seriousness in the boys. I have made them aware of the importance of this game since it’s the last game before our important game against Zambia. “I have drawn their attention to the fact that Turkey is also a very good side and they should treat it as such. They are all looking forward to it and I believe they will give their maximum best.“What I hope to achieve is that tactically, all the players perform all their roles that have been given to them. Turkey is a very good side and they need to see at the highest level, how they perform as well and their confidence level,” the Ghana coach said.