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Newsmakers

Pennsylvania Senate Passes Hybrid Pension Bill

The state’s 40-9 vote on Senate Bill 1 could move teachers and employees of non-high-risk jobs to a hybrid plan.

By Chris Butera

In a landslide vote, Pennsylvania’s state Senate passed a bill Monday that could shift the retirement benefits landscape for most state and school employees come 2019.

Passing by a 40-9 vote, Senate Bill 1 could move employees of non-high-risk jobs into a hybrid pension system, where they would receive half of their benefits from a 401(a) defined contribution (DC) plan and half from the current taxpayer-funded plan.

“I applaud the 40 bipartisan Senators who voted for this bill and thank Senators Scarnati, Corman, and Browne for their leadership on reforming our pension system,” Gov. Tom Wolf said in Monday’s press release. “This pension compromise achieves my foremost goals: continuing to pay down our debt, reducing Wall Street fees, shifting risk away from taxpayers, all while providing workers with a fair retirement benefit.”

While similar to a 401(k) plan, Senate Bill 1 could save more than $5 billion and protect taxpayers from $20 billion or more in additional liabilities if state investments fail to meet their projections, according to a news release from the office of Sen. Jake Corman, majority leader and chief sponsor of the bill. “Pension reform is not an easy issue to tackle,” said Sen. Joe Scarnati in Corman’s news release. “Changes must be made, but we also must acknowledge current retirees and the investments of current state employees.”

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Employees hired after January 1, 2019, could elect to receive all benefits from the new DC plan, while current workers will have a 90-day window to decide whether they’d like to opt-in.

The bill has been sent to the state’s House of Representatives for consideration.

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Home > News > Research > Morgan Stanley: Korea Tops May List of Index Rankings in Three Categories 
Research

Morgan Stanley: Korea Tops May List of Index Rankings in Three Categories 

Performance evaluated in terms of country, factor, and sector.

By Chris Butera

Morgan Stanley Capital International (MSCI) released its best and worst performing indices for May 2017, basing performance in terms of country, factor, and sector.

In single-country index rankings, the best-performing country was Korea at 8.1%. The worst in that category is Australia, at -3.9%. The All Country World Index (ACWI) returned 2.3% overall. Korea was also the best year-to-date (YTD) performing country at 27.6%. The worst YTD country was Canada at 0.4%. The YTD market index (ACWI) returned 11.3%. Korea forward P/E was also the cheapest, at 9.3. The most-expensive country was Switzerland, with a forward P/E of 17.9. The ACWI forward P/E is 16.

The performance of factor index ratings were driven by momentum, which was at 4.1% for May, and 16% YTD. The lowest-performing factors were May’s enhanced value (1.4%) and the YTD’s high dividend yield (10.1%). The ACWI returned 2.3% in May, and 11.3% YTD. Using the forward P/E, minimum volatility USD is the most-expensive factor with a 19% forward P/E. Enhanced value is the cheapest, with a forward P/E of 9.8. The ACWI forward P/E is 16.

Finally, May’s best-performing sector was utilities at 5.6%. Its worst was energy at -1.5%. The ACWI returned 2.3%. Information technology is the best YTD performing sector at 21.9%, while energy falls to the bottom of the pile at -6.9%. The ACWI has returned 11.3% YTD. Using the forward P/E, real estate was revealed at the most-expensive sector, with a forward P/E of 22. Financials were the cheapest with a forward P/E of 11.8. The market forward P/E is 16.

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