Week ending 6 November 2020
At its meeting on 4 November 2020, and in response to the deteriorating Covid-19 position, the Bank of England’s Monetary Policy Committee voted unanimously to maintain the 0.1% Bank Rate and to increase its purchases of gilts by a further £150 billion (to £875 billion).
The Coronavirus Job Retention Scheme will remain open until 31 March 2021, following the announcement of the second lockdown in England. The Job Support Scheme, which was due to replace the CJRS, has been deferred. For claims running through to January 2021, employees will receive 80% of their usual salary for hours not worked, subject to a maximum of £2,500 per month. Employers will have to meet the costs of national insurance and pension contributions.
The Committee stage of the Bill took place this week, with various amendments that had been made in the House of Lords being removed. The extended powers for the Regulator were discussed, with concern again expressed about the scope of the new powers. Two amendments to this part of the Bill were voted down, but the Pensions Minister did promise further regulation and consultation by TPR on this topic. The Bill now moves to its report stage and third reading in the Commons, before heading back to the Lords and, possibly, Royal Assent by Christmas.
The M&S Pension Scheme has completed two buy-ins with Aviva and Phoenix, for £390 million and £360 million respectively. Both transactions made use of umbrella contracts set up under previous buy-ins with these insurers. Allowing for the previous transactions, the Scheme has now insured around 80% of its pensioner liabilities.
In the news this week, the second Lloyds judgement says that historic transfer payments need to reflect GMP equalisation, the Pension Schemes Bill moves back to the Lords, TPR gets tough on AE compliance, the FCA surveys DB transfer advisers again and another 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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