Week ending 13 December 2019
In yesterday’s General Election, Frank Field (who resigned from the Labour Party in the summer) lost his Birkenhead seat and so will be required to step down as chair of the Work and Pensions Committee – a role whose importance has increased greatly during his tenure.
With the Conservatives returning to power, the Pension Schemes Bill is expected to return to Parliament in double quick time. As previously drafted, the Bill’s provisions would:
- give new powers to the Pensions Regulator covering scheme funding and corporate events
- facilitate the introduction of collective DC schemes
- introduce rules to compel providers and schemes to participate in the pensions dashboard.
The new rules for trustees to set strategic objectives for their investment consultants and hold competitive tenders for fiduciary management appointments (covering 20% or more of a scheme’s assets) came into force on 10 December 2019. Fiduciary managers and investment consultants also have increased responsibilities under the rules.
Mothercare’s two defined benefit pension schemes are no longer the responsibility of Mothercare UK Ltd, owner of the group’s UK retail operations and currently in administration. Instead they have been assigned to a new legal entity, Mothercare Global Brand Ltd, which is focused on the global international franchise arrangements.
The Office for National Statistics has published data on private pension wealth covering the period from April 2016 to March 2018. This shows that pension wealth has increased to 42% of total wealth, up from 34% in the period from June 2006 to July 2008. Private pension wealth now totals £6.1 trillion. Nearly half of total pension wealth is held by pensioners. Despite DB closures and automatic enrolment, 80% of pension wealth for active members and 60% for deferred pensioners relates to DB pensions.
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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