Pension news

Week ending 3 April 2020

More TPR guidance on Covid-19

The Pensions Regulator has released updated and extended Covid-19 guidance, covering DB funding and investment for both trustees and employers, DC investment and updated guidance on administration.

TPR says that trustees should be open to employer requests to suspend deficit contributions, but they should ensure that full backing information is provided. If not, the suspension should be for a very limited period (no longer than three months). No dividends should be paid by the employer during this period and any deferred contributions should be made up within the timeframe of the current recovery plan. Arcadia Group is reported to be one of the first to take advantage of the new regulatory easements.

The Regulator suggests that trustees may want to consider suspending cash equivalent transfer value quotations and payments for up to three months, in order to review the terms and assess the impact that they are having on their scheme’s administration service.

These regulatory easements will be in place until the end of June 2020, but this will be kept under review.

General levy increase cancelled

The 10% increase to the general schemes levy, due to take place on 1 April 2020, has been cancelled due to Covid-19. The government will now review the structure of the levy, although a significant increase is to be expected from April 2021.

HMRC delays final GMP data cuts again

The timeline for issuing the final GMP data cuts was due by the end of March. However, as a result of Covid-19 work, HMRC has announced a delay and said that it is aiming to publish a revised timeline by the end of April.

Stay calm and don’t rush financial decisions

The FCA and TPR, supported by MaPS, have published a statement telling savers to stay calm and not rush into making decisions about their pensions. There is concern that the Covid-19 pandemic and ensuing investment volatility is making savers more vulnerable to scams and to making poor decisions.

Two buy-in announcements

It has been announced that two DB schemes of WPP completed a £250 million buy-in with PIC, although the transaction itself took place towards the end of 2019. Meanwhile Castings has secured a £72 million bulk annuity with Aviva, covering the remaining uninsured liabilities of its two DB schemes. This deal was finalised in March 2020.

Recent publications

News

18 September 2020

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.

Perspective

Endgame planning

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.

Arena

Pensions Arena July 2020

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.

Perspective

Emerging from lockdown

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.

Briefing

Getting buyout ready

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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