Week ending 15 January 2021
The Pensions Regulator has released a short, interim response to its first consultation on the new DB funding code. There were 127 responses to the first consultation. One of the key areas of concern was how the principles that have been outlined would be applied in practice to the proposed new twin-track regime (Fast Track and Bespoke), in particular where the Fast Track guidelines would be set.
TPR expects its second consultation to take place in the second-half of 2021. That consultation will include a full summary of the responses from the first consultation and the approach TPR has taken in the light of those responses. It will also include the draft code of practice for consultation and confirm TPR’s proposed regulatory approach.
The Pensions Minister has confirmed in a written answer to Parliament that the new powers being granted in part 3 of the Pension Schemes Bill will not be applied retrospectively. These powers include the new criminal sanctions and information gathering powers.
The DWP has published its review of the default fund charge cap and standardised cost disclosure. In 2020, a DWP survey found that the average charge across all members in qualifying schemes was 0.48% pa, significantly below the 0.75% cap. The DWP has confirmed that the level of the charge cap will not be changed and transaction charges will not be included within the cap. However, it is planning to set a de minimis fund size of £100 below which a member’s AE pot cannot be charged a flat fee. No timescale is given for the introduction of the de minimis fund size.
The Government has announced that further assets will be included in the scope of the Dormant Assets Scheme. A dormant asset is one where the customer has not used it for many years and the provider has been unable to reunite with the customer, despite best practice efforts. Funding raised through the expansion should mean that more than £800 million becomes available to support good causes, social investments and environmental initiatives. The pension assets being added to the scope are annuities with a guaranteed payment period, income drawdown plans and deferred annuities. The Government is also reconsidering whether contract-based DC pensions should be included in the scheme in the future.
Hymans Robertson announces today that it has acquired Bath Actuarial Consulting (BAC). At the same time Andrew Udale-Smith and Leonard Bowman from Bath Actuarial Consulting (BAC) will be joining the firm as new Partners.
In the news over the last week, the DWP responds to its consultation on climate risk governance and reporting for pension schemes, transfer-blocking powers could be on the horizon, MaPS delivers on pension guidance and there’s more de-risking.
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.
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