Week ending 8 February 2019
Innovation in DC Investment
The Department for Work and Pensions has launched a wide-ranging consultation on Investment Innovation and Future Consolidation of occupational DC schemes. The consultation sets out three proposals aimed at helping to facilitate DC investment in less liquid assets, such as small and medium sized unlisted firms, green energy projects, housing and other infrastructure. The three proposals within the consultation would require:
- larger DC schemes to document and publish their policies in relation to investment in illiquid assets, and to provide an annual report on their allocation to these kinds of investments
- smaller schemes to assess every three years whether their members would receive better value if the scheme were to consolidate into a larger scheme
- changes to allow performance fees to be included within the charge cap.
The consultation is open until 1 April 2019.
CMI plans to place less emphasis on historic data
The actuarial profession has published the results of a consultation on the core value of the “period smoothing parameter” in its annual mortality projection model. It plans to reduce this in the next version of the model CMI 2018, so that it is more responsive to the recent reduction in mortality improvements. The CMI is also planning an addition to the model which will enable users to adjust the mortality improvements between different populations.
Plumbing scheme issues Section 75 debt notices
The Plumbing and Mechanical Services (UK) Industry Pension Scheme has begun sending out section 75 debt notices to some employers in a bid to cover liabilities. The move comes after an action group for employers within the scheme accused the trustees of “failing in their duties”.
Debts reflect each individual employer’s share of the liabilities, as well as a proportionate share of ‘orphan liabilities’ from employers who had previously left the scheme, or who were unable to pay their share. Notices will be issued between now and 30 June 2019 and employers will be given at least 12 weeks to settle their debts. As at 31 October 2018, the Scheme had a section 75 deficit of £430 million and it is currently consulting about closing to future accrual.
Just Group confirms £158 million buy-in
Just Group has confirmed a £158 million buy-in with the Wyeth Group Pension and Life Assurance Scheme. The buy-in required the support of the sponsor, Pfizer, and covered 1,200 pensioners.