Week ending 3 July 2020
Four Opposition-sponsored amendments have been made to the Bill at the report stage in the House of Lords:
- a requirement to treat open defined benefit schemes differently from closed defined benefit schemes, ensuring that their closure is not accelerated
- ensuring that the publicly run MaPS dashboard has a year of operation before other providers can launch their versions
- stopping pension dashboards including a provision for financial transactions
- requiring trustees of collective money purchase schemes to report on the fairness to members of their scheme’s operation.
The Bill will move on to its Third Reading in the Lords and then to the House of Commons, with more changes likely.
In its 2020 analysis for Tranche 15 valuations, TPR’s modelling highlights that, due to the impact of Covid-19, schemes undertaking triennial valuations at 31 March or 5 April 2020 are likely to show a worse funding level and deficit compared to those they reported three years previously. If Tranche 15 schemes all had 31 March 2020 valuation dates and were to retain their recovery plan end dates, TPR estimates that the median required increase in deficit contributions would be between 50% and 75%. Around 20% of such schemes would need to increase deficit contributions to more than three times their current level!
The Regulator has finally published its corporate plan for 2020-21, which needed significant revision to reflect the challenges of the Covid-19 pandemic. It looks forward only one year, rather than the usual three.
The Willis Pension Scheme has agreed a longevity swap with Munich Re to cover around 3,500 pensioner members and about £1 billion of liabilities. The risk was transferred via a captive insurer, based in Guernsey, which is fully owned by the Scheme’s trustee.
Meanwhile the IPC Media Pension Scheme has completed a £290 million pensioner buy-in with Rothesay Life.
In the news over the last week, the Pension Schemes Bill is at the final hurdle, automatic enrolment limits are reviewed, there is new research into trustee decision-making, the FCA sees signs of improvement in DB transfer advice and a full buy-in is completed.
This quarter’s Arena has a summary of our recent Pensions Perspective, “Endgame planning comes of age”, which looked at how long-term funding and investment plans are evolving and why companies are increasingly taking the lead in designing an endgame strategy. It also shows all the usual financial and investment analysis for the quarter ending 30 September 2020.
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.
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