Week ending 7 May 2020
The Office for National Statistics has explained how it plans to collect data on prices and compile the usual inflation indices during lockdown and beyond. The problems ONS faces are that, during April, its price collectors were not able to visit the normal retail outlets to obtain prices, whilst some goods and services have simply not been available during lockdown.
April’s CPI and RPI will therefore reflect the new workarounds. These include remote collection of prices and so-called imputed pricing where it is not possible to collect prices. For those items that remain available, the imputed price will be based on the prices and movements in price of similar goods and services. For those that are simply not available, the imputed price will aim not to disturb the overall price index. Around 20% of the basket of goods and services that make up the different inflation measures is currently unavailable.
Whilst, in the very short term, these workarounds should provide more stability to inflation indices, it may well mean that they become more unstable as goods and services become available again.
ITV has reportedly agreed with the trustees of its DB scheme to defer £15 million of deficit contributions from the first half of 2020 to the second half of this year. The scheme’s trustees are quoted as being satisfied that members’ interests are protected and that the deferred contributions will be paid within the timescales of the current recovery plan.
Deloitte is reportedly consulting with its employees about reducing the current maximum 12% employer DC contribution rate down to 4.5% for 12 months, due to the current difficult business environment.
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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