Week ending 11 December 2020
David Fairs has written about the new DB funding code in his latest blog. The Regulator has read through the 130 or so responses to the first consultation on the new code and is considering whether any of the principles which it set out in the first code need to be adjusted. Thinking about the parameters for the Fast Track option will not begin until the Regulator has thought through the different economic scenarios which are likely post-Covid and post-Brexit. The blog does say that open schemes should be able to invest with greater freedom than more mature schemes, but trustees will need to evidence how they would manage the risk of their scheme closing or maturing faster than expected.
TPR has announced that it is likely to add two new questions to DB scheme returns due next year, asking trustees to provide:
- a website link to their published statement of investment principles
- the trustees’ assessment of their employer’s covenant grade – and where it would fall in the TPR grading system.
TPR will confirm the final questions in early January 2021, with the scheme return notice being issued to trustees from the end of January. The Regulator intends to give schemes longer than the usual 6 weeks to respond, with all DB scheme returns needing to be submitted by 31 March 2021.
The National Grid UK Pension Scheme has completed an £800 million buy-in with Rothesay Life, following its two 2019 buy-ins of £2.8 billion with Rothesay Life and £1.6 billion with Legal & General.
Meanwhile the Northern Gas Networks Pension Scheme has agreed a £385 million buy-in with Legal & General, covering the liabilities of around 600 pensioners.
There were also two smaller transactions, with the Lovell Pension Scheme completing a £110 million buy-in with Rothesay Life and the Homestyle 2007 Pension Scheme buying out all its pension liabilities via a £103 million bulk annuity with Aviva.
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.
Unit 13A | Church Farm Business Park | Corston | Bath | BA2 9AP | Telephone: +44 (0) 1225 481450
Registered Address: 37 Great Pulteney Street, Bath BA2 4DA | Company Registered in England & Wales Company No. 07975135