Week ending 2 October 2020
The PPF has published its consultation for the calculation of 2021/22 levies. This covers one year rather than the expected three, in an acknowledgement that the current situation requires flexibility. The PPF expects to collect £520 million in 2021/22, which is £100 million less than it plans to collect in 2020/21. It is proposing an adjustment that halves the risk-based levy for small schemes (those with less than £20 million in liabilities), as well as a reduction in the risk-based levy cap from 0.5% to 0.25% of liabilities. It will also recalibrate the insolvency scores for sponsoring employers with credit ratings, using actual versus expected experience up to the end of 2020. Overall, the PPF estimates that 89% of schemes which pay a risk-based levy will see a reduction in their levy next year.
However, the PPF has said that the main impact from Covid-19 will be felt in the 2022/23 levies, which it expects to increase from 2021/22. A response to the consultation is expected early in 2021.
The PPF has also announced extended payment terms of up to 90 days for firms struggling to pay their 2020/21 levy due to the pandemic.
The Government has disagreed with the Public Accounts Committee’s recommendation for it to evaluate the impact of pension tax reliefs, arguing that it has undertaken several consultations on aspects of pension tax relief over the last few years. The Government has said that it will continue to engage with stakeholders to understand the tax regime’s impacts and to gather evidence through consultations, but it does not think that now is the right time for a formal evaluation. HMRC will publish data to show who is benefitting from pension reliefs, but only to the extent that data is available.
Pension news Week ending 23 October 2020 New superfunds guidance The Pensions Regulator has published updated guidance for trustees and sponsoring employers who are considering
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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