Week ending 3 April 2020
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.
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.
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.
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.
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.
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.
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