Week ending 25 September 2020
The Continuous Mortality Investigation (CMI) is consulting on how to allow for 2020’s exceptional mortality data within its next annual update of the CMI model. Taking into account 2020’s mortality experience in the usual way would lead to substantial falls in life expectancy, which the CMI believes its users would not consider to be reasonable. Its proposal is for the core version of CMI 2020 to exclude the 2020 mortality data entirely, although users will be able to place more or less weight on data for individual years.
The DWP has launched a cross-sector working group to look at the problems caused by the growth in the number of small DC deferred pension pots. This was already a problem in 2012, since when it has been exacerbated by the introduction of automatic enrolment. The working group is aiming to report this autumn with an initial assessment of the problem, recommendations and an indicative roadmap of actions for both the industry and the government.
The DWP has also launched a call for evidence on the alternative AE quality tests being used for defined benefit and hybrid schemes. There is a statutory duty to review these requirements every three years, with the last review taking place in 2017.
The Chancellor has reportedly scrapped his autumn Budget, in order to focus on immediate measures to help businesses and the economy as part of the Government’s response to the pandemic, including the new Job Support Scheme.
The Barclays Bank UK Retirement Fund has used the 2020 deficit contribution of £500 million from Barclays, plus a further £250 million of Fund assets, to subscribe to a £750 million bond, which is backed by UK government gilts but issued by an entity within the Barclays Group. The bond entitles the Fund to twice yearly interest payments with full repayment in cash of the £750 million in three equal instalments of £250 million in 2023, 2024 and 2025.
The TI Group Pension Scheme has completed a £142 million buy-in with Aviva, covering the benefits of 1,224 pensioners. It is the sixth bulk annuity completed by the Scheme.
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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