Pension news

Fortnight ending 7 August 2020

Regulatory intervention

The Pensions Regulator has published details of its investigation into the Bernard Matthews pre-pack administration. This report explains why it did not use its anti-avoidance powers and, in particular, issue a Contribution Notice.

In another case, the Regulator’s FSD Warning Notice led to a strengthened covenant for the National Institute of Agricultural Botany’s scheme. An organisational restructure in 1998 had meant that the NIAB was split in two and significant land assets were transferred to a separate charity, which had no responsibility for the scheme. After lengthy negotiations, the charity has now become a second statutory employer and jointly responsible for the deficit repair contributions to the scheme.

WPC pension scams inquiry

The Work and Pensions Committee has launched an inquiry into pension scams, as the first part of a three-part inquiry looking at the impact of the pension freedoms introduced in 2015. The WPC’s remit includes a review of HMRC’s tax treatment of pension scam victims.

DC retirements

The PLSA has published proposals for a new regulatory regime, designed to help support DC members with their retirement decisions. The proposals would require schemes to support their members with decumulation decisions, including providing or signposting members to decumulation products which meet certain minimum quality standards. The PLSA is seeking evidence to refine its proposed regulatory framework by 4 September 2020.

Implementation statements

The PLSA has also published guidance for both DB and DC schemes about the new requirement for annual implementation statements, which takes effect from 1 October 2020. Trustees must disclose in these statements how they have followed the objectives and policies set out in their SIPs.

More GMP equalisation guidance

The GMP Equalisation Working Group has issued more guidance, this time to help schemes with their member communications. The guidance contains broad principles to follow, Q&As to use when responding to members, a checklist for the communications needed and, perhaps most importantly, a jargon buster.

Bulk annuities

The LV= Employee Pension Scheme has agreed an £800 million buy-in with Phoenix Life, which involved converting an existing longevity swap with ReAssure. The buy-in covers the benefits of around 4,100 pensioners and 200 deferred members. Meanwhile, the Countrywide Farmers Retirement Benefits Scheme has transacted a £100 million PPF+ buy-in with Legal & General, following its exit from PPF assessment last year. The deal covers the benefits for 712 pensioners and 360 deferred members, securing benefits above the PPF compensation level. It is expected to move to a buyout shortly.

Recent publications

News

25 September 2020

In the news this week, the CMI asks for industry views on how to allow for 2020’s mortality experience, the DWP launches a small pots working group, the autumn Budget is abandoned but the Chancellor announces new measures to help businesses, the Barclays scheme subscribes to a Barclays bond and there is another repeat buy-in.

Perspective

Endgame planning

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.

Arena

Pensions Arena July 2020

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.

Perspective

Emerging from lockdown

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.

Briefing

Getting buyout ready

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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