Week ending 15 November 2019
As part of their ongoing work to highlight the dangers of pension scams, The Pensions Regulator and Financial Conduct Authority have released the findings of recent research showing that it could take a victim 22 years to build a pension pot of £82,000, which is the average amount lost to scammers. More education does not seem to provide more protection, as people with a degree are 40% more likely to accept a free pension review from a company they don’t know, which is a common scamming tactic. The research shows that the regulators’ ScamSmart campaign is not having enough of an effect, with nearly two-thirds of people still willing to trust someone offering pension advice out of the blue, another common scamming tactic.
Pension Insurance Corporation (PIC) has converted an existing longevity swap into a £750 million buy-in for the Scottish Hydro-Electric Pension Scheme. The trustee of the scheme had previously hedged all longevity risk in their pensioner population through a combination of a £250 million buy-in with PIC and the longevity swap with Legal & General. The longevity reinsurance behind the swap remains in force and has transferred over to PIC.
The Consumer Prices Index dropped to 1.5% in the year to October 2019, which is the lowest level since November 2016. CPIH, which the Office for National Statistics prefers, was also 1.5% in October, whilst RPI was 2.1%.
In the news this week, the Regulator provides some timely guidance, the Conservatives publish their manifesto, HMRC seeks to encourage members to declare their annual allowance charges and another large buy-in is announced.
Despite the very different circumstances facing individual companies, bac‘s autumn 2019 survey reveals a surprisingly consistent picture of the actions which companies are finding most attractive to manage their DB and DC pension arrangements.
As DB liabilities have become legacy issues to be managed, governance has become the umbrella term for a broad range of risk management tools. In this publication, we look at the DB governance solutions we have helped our clients to implement.
As pension trustees and sponsors get serious about good governance, a key question is whether technology can play a meaningful role or is simply an expensive addition that looks good but adds little value?
In this Pensions Perspective, Andrew Udale-Smith looks first at the different types of adviser review and when and how they might best be used. Then he focuses on how to design a smooth and efficient process for a full market tender.
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