This month I started to assess the economic impact of Covid-19. To help those struggling with the economic slowdown, a post shared some tips gleaned from the uncertainty of freelancing. A recently published article looks at how the current crisis is making it more important for companies to look after the financial wellbeing of their employers. The virus will have significant implications for the sponsor covenant and there are concerns about a possible sharp spike in the number of schemes set to enter the PPF. Next month I’ll be looking at which trends will be accelerated by the virus and how this will affect the way institutional investors allocate assets.
Staying happy and productive in an economic slowdown
The uncertainty associated with being my own boss for the last 14 years is now proving a useful experience as the economic slowdown starts to bite. Staying happy and productive in the face of an ambiguous financial future is challenging but in this blog I outline the habits and techniques I have found useful.
Engaging members on financial wellbeing
There is a little point in designing a program to help employees’ financial wellbeing unless it is helpful. But too many employers fail to measure whether their communications lead to behaviour change. This article discusses how a more personalised service and better information about other pension pots can help staff to take action. Covid-19 has made this an even more important issue as financial concerns have become so heightened for both employers and employees.
Will Covid-19 undermine companies’ ability to sponsor defined benefit pension schemes?
The Pension Regulator is concerned about the impact of Covid-19 on the strength of sponsoring companies. There is good to reason to be worried: around 5-10% of UK defined benefit schemes have deferred deficit contributions. After the global financial crisis, hundreds of schemes entered the Pension Protection Fund. With the virus threatening a more extreme economic crisis, this post discusses how 1,000 schemes could fall into the PPF and whether the crisis could alter the way sponsor covenant risk is assessed in the future.
Investing after the crisis
Global crises have the power to re-shape societies. World War I led to great advances in disease prevention and awareness. Covid-19 could promote a similar acceleration in the medical understanding and therapies. Our society could be re-shaped in other ways, perhaps rendering the traditional office for professional services obsolete. In May I will be writing about which trends will be accelerated and what the implications are for institutional investors.