Week ending 22 May 2020
The impact of Covid-19 is clearly seen in the April 2020 inflation figures, published by the ONS this week. CPI over the year to April 2020 was 0.8%, down from 1.5% in March, whilst RPI was 1.5% in April, down from 2.6% in March. The reduction in energy and fuel pump prices was the major contributor to this month’s falls in the level of inflation. April 2020’s figures are the first to use the Covid-19 workarounds, as reported in our news of 7 May 2020, for items whose prices cannot be collected in the usual way or are temporarily not available.
TPR’s David Fairs has written a blog responding to recent calls for the Regulator to review or abandon its first consultation on the new DB funding code due to the current economic situation. He strongly disagrees, believing the principles set out in the funding consultation are the right ones and arguably even more important in the light of Covid-19. He acknowledges that the parameters for the long-term objective (discount rate of gilt yields + 0.25% – 0.5% and timescale to reach that target of 12 to 14 years) will need to be reviewed in light of the change in market conditions. The end date of the consultation, currently 2 September 2020, will be kept under review, raising the possibility of a further extension.
TPR has updated its DC scheme management and investment guidance to warn DC trustees that the temporary re-direction of contributions due to a fund closure (e.g. for a property fund) could create a new default arrangement for members!
A draft statutory instrument has been laid in Parliament granting new powers for the Pensions Regulator to obtain data from telecommunications firms. This is linked to the new Regulator powers contained within the Pension Schemes Bill and is to be used for the purpose of preventing and detecting crime, including pension scams.
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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