Week ending 31 January 2020
The Bill has had its second reading in the House of Lords, with issues raised about the wide-ranging powers being granted to the Pensions Regulator. A further concern is whether the new criminal sanctions might capture normal business activity and, in some cases, could apply to trustees and other third parties. There was also criticism about the lack of detail in the pensions dashboard proposals. The Bill will now proceed to the Committee stage.
Labour MP for East Ham, Stephen Timms, has been announced as the new chair of the Work and Pensions Select Committee, stepping into Frank Field’s shoes. Mr Timms has been Minister for Pensions twice and was also Shadow Minister for Pensions between 2010 and 2015.
Britvic has been told its scheme cannot change from RPI to CPI linked pension increases. The judge ruled that the scheme could only use a higher rate than that specified in its rules (rather than a lower one). The Chancellor’s consultation on possible future changes to RPI will begin in March 2020.
Three Lloyds Banking Group pension schemes have reinsured £10 billion of their longevity risk with Pacific Life Re. The deal, which covers the longevity risk of members in the Lloyds Bank Pension Schemes No 1 and No 2 and the HBOS Final Salary Pension Scheme, was facilitated by Scottish Widows.
The Co-operative Pension Scheme (known as PACE) has completed a bulk annuity deal with Aviva covering the liabilities of around 7,000 members and 12% of the scheme’s assets. The scheme has agreed an umbrella contract with the insurer, making it easier to complete future deals.
In the news this week, the CMI asks for industry views on how to allow for 2020’s mortality experience, the DWP launches a small pots working group, the autumn Budget is abandoned but the Chancellor announces new measures to help businesses, the Barclays scheme subscribes to a Barclays bond and there is another repeat buy-in.
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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