Week ending 19 June 2020
The Pensions Regulator has published standards that it expects to be met in the period before the full legislative framework is in place. The guidance, which comes into force immediately, covers those setting up and running a DB superfund model, including trustees, and is expected to allow superfunds to be assessed by TPR and to proceed with their first transactions. Trustees will need to be certain that a decision to enter a superfund is in the best interests of scheme members.
Capital adequacy is a key part of the regime with superfunds required to hold sufficient assets to ‘enable 100% of members’ benefits to be protected to a high degree of certainty’. Additional assets will need to be held in a capital buffer, which can be accessed to support the liabilities if there is adverse experience. Individual transactions into superfunds will need to be submitted to the Regulator for clearance before proceeding.
TPR has updated its guidance on reporting duties and enforcement activity during the Covid-19 situation. Certain of the reporting requirements were paused for both administrators and trustees and will resume as normal from 1 July. These requirements include, amongst others, reporting on suspended deficit recovery contributions, late valuations, and delays in CETV quotations and payments. TPR’s DB scheme funding and investment page has had a major rewrite to consolidate previously published guidance and explain the regulatory approach in the current situation. The DB scheme funding guidance for employers page has also been updated, in line with the updated guidance for trustees.
This is the question pension schemes are reportedly being asked this week by the pensions minister. Schemes are being asked to report to the DWP by 8 July on their readiness to deliver their data to pension dashboards, how they are reviewing their data quality and any problems and solutions identified in this work. The minister is clear that regulations on pensions dashboards will be introduced quickly once the Pension Schemes Bill has been enacted. There is concern in the industry about the current lack of clarity on the data standards that will need to be complied with.
In the news this week, pensions tax relief is back in the spotlight, the Treasury publishes draft legislation for CDC schemes and a big 4 accountant looks to temporarily reduce its DC contributions.
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.
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.
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