Week ending 28 June 2019
Updated DC investment guidance
The Pensions Regulator has published updated guidance for trustees on DC investment. The guidance takes into account the changes required to schemes’ statements of investment principles by October 2019. The Regulator’s guidance also provides further clarity around what is meant by financially-material considerations and stewardship, and how to prepare an implementation statement.
David Fairs, Executive Director of Regulatory Policy, Analysis and Advice at TPR, said “Climate change is a core financial risk which trustees will need to consider when setting out their investment strategy. They will be obliged to show how they are taking this and other financially material considerations into account over the lifespan of investments. This guidance provides updates as well as clarity for trustees, including considerations when planning scheme investments.”
2019 scheme funding statistics
The Regulator has also published the 2019 update to its scheme funding statistics, which is based on schemes with valuation dates between 22 September 2016 and 21 September 2017 (so-called tranche 12 valuations). Over the previous threeyear period, the growth in schemes’ assets from investment returns and deficit contributions broadly matched the growth in liabilities, with the result that the average funding level on a technical provisions basis was relatively unchanged (23% of schemes were in surplus against their technical provisions). The average length of recovery plans was 7.3 years. The average real discount rate dropped to -0.67%, compared with +0.92% three years earlier.