Week ending 6 December 2019
There have been mass strikes in France this week prompted by President Macron’s proposed pension reforms. School and transport workers have been joined by police, lawyers, hospital staff, airport staff, energy workers, refuse collectors and postal workers for a general walkout that includes millions of workers. The strikes started on 5 December and no end date has been given.
The pension reforms aim to replace the 42 different private and public pension schemes in France with a universal points system, which President Macron says would be fairer. The official French retirement age is 62 but benefits and retirement ages differ across industries. The reforms include a proposal for anyone retiring before age 64 to have a reduced pension.
The last time major pension reforms were proposed in France was in 1995. They led to three weeks of strikes with popular support and the government reversed its proposals.
Unilever is proposing changes to its UK pension benefits. These include closing the DB section to new entrants and reducing the level of future DB accrual by:
- changing the accrual rate from 1/60th to 1/80th
- reducing the maximum pensionable salary that counts for DB accrual from £60,500 to £45,000.
At the heart of the proposed approach is a “Benefits Envelope” of 25% of pensionable salary which employees will be able to allocate to a variety of benefits including:
- DB pension (for existing members only)
- DC pension
- topping up life assurance or
- take home pay (after tax and NI).
In the news over the last week, the Regulator provides an interim response to its funding code consultation, the Pensions Minister confirms TPR’s new powers will not be retrospective, a ban will be introduced to stop flat fees being charged on small pots and the Dormant Assets Scheme expands to cover pensions.
This quarter’s Arena has a summary of our recent Pensions Perspective, “Endgame planning comes of age”, which looked at how long-term funding and investment plans are evolving and why companies are increasingly taking the lead in designing an endgame strategy. It also shows all the usual financial and investment analysis for the quarter ending 30 September 2020.
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.
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