Fortnight ending 4 September 2020
The DWP has published a consultation containing proposals to require larger occupational pension schemes to address the risks and opportunities from climate change. Trustees would be legally required to assess and manage climate risk and to report on this activity annually. One requirement would be to calculate the carbon footprint of the scheme and assess the impact on the scheme’s assets and liabilities of different temperature rise scenarios.
The proposals are in line with recommendations from the Taskforce of Climate-related Financial Disclosures and cover the following areas:
- risk management
- metrics and targets.
The first tranche of schemes (those with £5 billion or more of assets) and all master trusts would need to comply from October 2021 and report by the end of 2022. The relevant dates would be a year later for schemes with £1 billion or more of assets.
The Pensions Bill, which is currently moving through Parliament, contains the powers to enact these proposals. A further consultation on the enabling regulations is planned for late 2020 or early 2021.
The Government has confirmed, via a written ministerial statement, that it still intends to legislate to increase the minimum age at which people can access their pension from 55 to 57 in 2028.
The Marathon Service (GB) Limited Pension and Life Assurance Scheme has completed a buy-in with Rothesay Life for £610 million, securing benefits in full for the 740 pensioner and 700 deferred members of the scheme.
The Hitachi UK Pension Scheme has completed a buy-in with Legal & General for £275 million, covering the remaining deferred and pensioner liabilities in the scheme.
In the news this week, the Regulator publishes its strategy for the next 15 years and, along with the Pensions Minister, also focuses on superfunds, whilst the PLSA launches an initiative to help make climate-aware investment easier for schemes.
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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