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, there are two DB scheme closures, changes to the Coronavirus Job Retention Scheme and the FCA publishes new rules on pension transfers whilst the CMA reminds trustees about their compliance statements
Given the very company/scheme-specific impact of the Covid-19 pandemic, in this quarter’s Arena we simply show all the usual financial and investment analysis for what was a very turbulent first three months of 2020, plus a summary of key pension developments and Company pensions news over the quarter.
Over the autumn of 2019, BAC conducted an extensive survey of the actions which companies are taking to manage their defined benefit (DB) and defined contribution (DC) pension arrangements.
2019 marked 50 years since Neil Armstrong walked on the moon and this was obviously on the Queen’s mind in her Christmas message as she talked about a bumpy year but one with small steps of progress as well. In terms of pensions, it also felt like a year of small steps and occasional bumps. In this quarter’s Arena, we take a positive look back at 2019, as well as looking forward to some expected pension developments over 2020.
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.
Unit 13A | Church Farm Business Park | Corston | Bath | BA2 9AP | Telephone: +44 (0) 1225 481450
Registered Address: 37 Great Pulteney Street, Bath BA2 4DA | Company Registered in England & Wales Company No. 07975135