Week ending 20 March 2020
Covid-19 continued to decimate financial markets, as the seriousness of its impact has begun to become clearer. The Bank of England cut base rate to just 0.1%, as the Government outlined a series of measures designed to support those businesses and individuals most likely to suffer over the next 3 to 6 months. Some sponsors of DB schemes are facing serious liquidity issues and a TPR statement on how those companies and their trustees should respond is expected imminently. The PPF has also issued its own statement on Covid-19, designed to reassure beneficiaries and deal with some questions from levy payers.
Given the falls in equity markets and the reductions in gilt yields, the Universities Superannuation Scheme exceeded the threshold of its key self-sufficiency funding measure for five consecutive days and accordingly reported this to the Pensions Regulator. The trustees are now said to be considering what action is required and will do so in the context of the forthcoming valuation of the USS, which has an effective date of 31 March 2020.
The cross industry GMP Equalisation Working Group has released more guidance, this time on the timescales of when to rectify members’ GMP benefits in light of the equalisation work that will be needed and the possibility of combining the work.
ITV has lost its eight year legal battle against the Pensions Regulator and has been given six months to put financial support in place for the Box Clever pension scheme. The scheme has around 2,800 members and a £115 million deficit. The financial support will need to be approved by TPR.
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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