Week ending 27 September 2019
Thomas Cook heads for PPF?
Thomas Cook’s four DB schemes, which have approximately 13,500 members, are expected to enter the PPF assessment period following the firm’s cessation of trading on 23 September 2019. The schemes, whose assets total around £1.4 billion, are reported to have a small surplus on a Section 179 basis, which may mean they can wind up outside of the PPF.
PPF levies up
The PPF has launched a consultation on its levy rules for 2020/21. It is not proposing any changes in approach from 2019/20 but its levy estimate is £620 million, which is 8% larger than expected levies of £575m in 2019/20. This increase reflects projected increases in scheme liabilities and underfunding.
Biggest buyout ever
telent and the trustees of the GEC 1972 Plan have agreed a buyout of £4.7 billion with Rothesay Life. The deal covers 39,000 members including both pensioner and deferred members. Initially, this is structured as a buy-in, with the second phase of converting to a buy-out expected to be completed by the end of 2022.
Retirement income market data
The FCA has published its latest set of data collected from firms that provide retirement income products. This shows that, out of 645,000 pension plans that were accessed in 2018/19, more than half were fully cashed-in. However, 90% of such plans were valued at less than £30,000. The majority of larger pension plans (over £100,000 in value) went into drawdown. For just under half of all the plans accessed, the member did not take either regulated advice or guidance. The data also shows a reduction in the number of DB to DC transfers, from 32,500 in April to September 2018 to 24,800 in October 2018 to March 2019.