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 DWP confirms its determination to bring about DC consolidation of smaller schemes, the Regulator ends more of its Covid-19 easements and the Court of Appeal rejects the claim that increases in the state pension age of women born in the 1950s was discriminatory.
Journey plans or glide paths may have been around for a long time but they’re at the heart of the Regulator’s proposed new funding code. In this Pensions Perspective, Leonard Bowman looks at how long-term funding and investment plans are evolving and explains why companies are increasingly taking the lead in designing an endgame strategy for their schemes.
This quarter’s Arena has a summary of our recent Pensions Perspective, “Emerging from lockdown”, which looked at how best to tackle the most common pension issues which companies are currently facing. It also shows all the usual financial and investment analysis for the quarter ending 30 June 2020.
As we keep hearing, we are living in unprecedented times. However, as we turn our attention to the future, what does the “new normal” mean for defined benefit pension schemes? In this Pensions Perspective, Leonard Bowman considers the most common pension issues that companies are facing and how best to ensure that the company approaches these on the front foot.
Covid-19 has created many challenges for DB schemes but, for those ready to transact in 2020, it may have created even more favourable market conditions for a buyout. The problem is that most schemes are not there yet. In this Briefing we look at what being “deal ready” actually means and what work it will involve.
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