Week ending 11 September 2020
The Trustee of the Universities Superannuation Scheme has launched a consultation with the scheme’s sponsor, Universities UK, on the proposed methodology and assumptions to be used in setting the technical provisions for the scheme’s 31 March 2020 valuation. USS is the largest UK private pension fund, with DB assets of £67 billion at 31 March 2020.
The proposals cover a wide range of outcomes, with the potential scheme deficit ranging from just under £10 billion to almost £18 billion. Similarly, the cost of future service accrual ranges from 29% to 38% of payroll. Adding in the cost of repairing the deficit, the total contributions required could range from 41% to 68% of payroll. The funding of USS is a shared responsibility of the sponsor and members, with the current total contribution rate being 30.7%, of which members pay 9.6% of their pay.
The People’s Pension and the Police Foundation have published a report calling on the Government to:
- ensure victims of pension fraud are not hit with tax penalties, as they are at present
- give pension companies the power to trigger an “urgent regulatory response” to savers they believe are at risk of fraud
- enable regulators to override the statutory right to transfer should a suspected scam be reported to them.
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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