Week ending 15 May 2020
The Pensions Regulator has updated its guidance for DC trustees during the Covid-19 pandemic. TPR says that DC transfers are a core financial transaction and should be a key priority for administrators and trustees. Trustees have also been told to complete due diligence checks and highlight the risk from scammers in their member communications. This guidance contrasts with that for DB trustees, where TPR had suggested that, in order to review transfer terms and/or to assess the administrative impact of transfer value quotes during the pandemic, trustees could decide to suspend transfer quotations and payments for up to three months.
HMRC has reportedly admitted that there could be problems for schemes trying to reconcile their GMP data using the final data cut HMRC is providing. This is because the final data cut uses data as at 5 April 2016. For a revalued GMP amount, HMRC recommend that their online checker service should be used instead. The discrepancies between the two sources of HMRC GMP data are likely to delay schemes’ work on finalising GMP reconciliation.
The Co-op sponsored PACE scheme has transacted its fourth bulk annuity of 2020, this time a £350 million deal with Aviva covering the liabilities of 2,300 members. The deal was completed under a previously agreed umbrella contract with Aviva.
Meanwhile, Legal & General has agreed bulk annuity deals for the US and UK pension schemes of IHS Markit, worth £78 million and £38 million respectively.
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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