Week ending 17 April 2020
The Institute and Faculty of Actuaries’ Continuous Mortality Investigation has moved to weekly monitoring of deaths due to the Covid-19 pandemic. In the first three months of 2020 standardised mortality rates in England and Wales were tracking closely to those for 2019. However, the CMI’s first weekly report shows that things were very different in the week ending 3 April 2020. In that one week the number of deaths was 59% higher than expected, which was more than 6,000 additional deaths. The CMI goes on to estimate that, by 13 April 2020, there could have been more than 25,000 excess deaths (i.e. relative to those expected if standardised mortality rates had been the same as in 2019) across the UK as a whole. These are not necessarily all linked to Covid-19, but many surely are.
The Regulator has published more guidance on its general approach to reporting duties and enforcement during the Covid-19 pandemic. Crucially, it sets out the main areas where easements do not apply.
Along with other cost-cutting measures such as salary reductions and furloughing staff, the Financial Times has reportedly decided to temporarily reduce its DC matching contributions in response to the Covid-19 pandemic. The reduction is from a level of two times to once times employee contributions and will take effect from May and last until January 2021.
The Co-operative Pension Scheme (PACE) has agreed a £400 million buy-in with Pension Insurance Corporation (PIC). This deal, concluded during April, covers around 2,000 members of the bank section of PACE. It is the third bulk annuity this year for PACE, with a £1 billion buy-in with Aviva announced in January and a £1 billion buy-in with PIC announced in February, those previous deals being for the Co-op section of the scheme.
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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