Week ending 24 April 2020
The Regulator has provided further guidance on how the Coronavirus Job Retention Scheme interacts with Automatic Enrolment, especially with those DC schemes where contributions are not based on AE band earnings, and for those employers who operate salary sacrifice arrangements. The guidance for trustees on DC scheme management and investment has also been updated with more information for employers wanting to reduce their contributions.
David Fairs, TPR’s executive director for regulatory policy, analysis and advice, has suggested that between 5% and 10% of DB sponsoring employers are currently seeking to suspend their deficit recovery contributions. Other reports have estimated the number of companies seeking a suspension at around 500.
Premier Foods has announced a segregated scheme merger of three of its DB schemes, the RHM, Premier Foods and Premier Grocery Products pension schemes. The RHM scheme is moving closer to a buy-out whereas the Premier Foods scheme has a sizeable deficit. The merger will save around £4 million in annual costs and allow any surplus on a buy-out of RHM to be redistributed to the other two schemes. The net present value of future deficit contributions is expected to reduce from £300-320 million to £175-185 million.
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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