Pensions archive

Tackling the cost of the single state pension

  • The end of contracting out will have significant cost implications for some companies.
[22-09-2015]

Data analytics: helping companies manage costs and improve return on benefit spend

  • There has been an increase in the number of organisations using analytics to improve employee benefit design and decisions.
[22-09-2015]

Sustainability in the pension’s world

  • What does sustainability mean in the context of Defined Benefit pension schemes?
[22-09-2015]

Kicking the deficit can down the road

  • More than half of company pension funds have lengthened deficit recovery plans by three years or more.
[02-07-2015]

What to expect from Cameron

  • The General Election result may have multiple implications for companies sponsoring pension arrangements.
[02-07-2015]

The death knell for RPI?

  • Increasing evidence that RPI as an inflation measure for pensions is no longer fit for purpose.
[02-07-2015]

De-risking pension schemes

  • Competitive tension in the insurance market means this is a good time for companies to consider reducing or securing their pension scheme liabilities.
[27-03-2015]

Cash calculations

  • As bond yields continue to fall, should companies challenge the approach used by actuarial advisers to determine the level of their cash contributions?
[27-03-2015]

Feeling the pension pinch

  • Falling bond yields have increased the cost of defined benefit pension schemes, but companies can take steps to manage the impact.
[08-01-2015]

UK GAAP changes may force accounting changes for Defined Benefit pensions

  • Pension scheme accounting to change from 1 January 2015
  • There are three main changes that have an impact on UK companies with defined benefit pension schemes who report under UK GAAP
[20-03-2014]

Global pension survey shows that defined benefit is a thing of the past

  • Survey reports that the death of defined benefits pensions is a global phenomenon
  • Only 6% of companies view DB as their preferred pension provision for the future, while 90% plan to focus on defined contribution
  • 83% of employers believe they need to give more flexibility to their employees in the way they save for retirement and take their benefits
[20-03-2014]

EU Pensions Directive – concern about solvency measure by the back door

  • Concerns that EIOPA continues to refine solvency measures even after the pillar 1 proposals on solvency were stopped by the commissioner
  • EC expected to issue proposals on governance and reporting this year
  • New data requirements may also be a challenge
[14-01-2014]

Revised funding Code of Practise – potential game changer

  • Comments on revised Code of Practise for defined benefit pension schemes funding due by 7 February 2014
  • Consultation on regulatory strategy also due
  • Integrated risk management is a central theme and focus on investment strategy is a potential game changer
  • A new approach – Covenant Driven Investment – is being positively received
[14-01-2014]

New ‘fair deal’ for pensions on work outsourced by central government

  • New guidance expected to reduce contractors’ costs and risks and enable competitive contract pricing
  • Look out for detail of contractor contributions to government pension schemes from each responsible department
[14-01-2014]

Defined ambition – the future of pensions?

  • 'Defined ambition' proposals detail government vision for future occupational pensions
  • Several different models are outlined
  • Concerns that legislation could apply differentially to the past and future and damage emergence of DA schemes
[14-01-2014]

Pensions regulator approach to Defined Contribution schemes

  • The strategy for regulating DC schemes sets out 6 principles and 31 quality features
  • Draft compliance and enforcement policy shows more involvement in DC scheme governance – involvement in ‘thematic reviews’ needed to manage reputation risk
  • Expectations of DC scheme trustees are outlined in Code of Practise 13
[14-01-2014]

Office of Fair Trading (OFT) progress on study of pensions charges

  • OFT study has focused on charges in DC schemes – six areas of concern identified e.g. some opaque charges and unfair discounts
[20-09-2013]

Risk-focused pension disclosures

  • Amended accounting standard will affect all IFRS reporters
  • New disclosure objectives for 2013 year end – need to explain: DB plans and risks; amounts in fs; effect on future cash flows
[17-09-2013]

Pension Protection Fund news

  • Levy will increase to £630m for 2013/14
  • Cap on compensation will increase for long-serving employees
  • PPF will switch to Experian for employer insolvency risk ratings
[13-09-2013]

Pension deficits impact investment and acquisition decisions

  • Over half the schemes surveyed by Bank of England had increased contributions and/or cut back benefits
  • Over a quarter reported a major impact on investment decisions, dividend payments and acquisitions
[11-09-2013]

State pension reform – speeding up

  • Abolition of contracting out brought forward to April 2016
  • Important to understand how State Pension Age interacts with policy on retirement age
[26-06-2013]

Commission withdraws solvency aspects of EU Pensions Directive

  • EC backed down on solvency reserving, but will push ahead with Pillars 2 and 3 – target Autumn for initial legislation
  • Reporting requirements expected to be more frequent
[26-06-2013]

Defined benefit pensions – more support for employers

  • New statutory objective means more backing from regulator
  • No change to statutory legislation on funding
  • Make the most of existing flexibility on funding
[26-06-2013]

Auto-enrolment – time to take stock

  • Opt-out rates lower than expected –so could have cost impact
  • Pensions regulator to publish monthly registration reports
[26-06-2013]

State pension reform to increase NI bills

  • NI bills will rise for employers still providing contracted out DB pensions from 2017
  • Assessment needed on whether this kind of pension is sustainable
[19-03-2013]

Funding defined benefit pensions

  • Government ‘call for evidence’ to inform decisions on changes
  • Smoothing will stabilise funding, lowering cash demands from pension trustees. But questions remain.
  • Government aim on affordability is to balance investment /growth and protections for pension members.
  • Comments on any tangible benefits for UK plc will be useful
[19-03-2013]

No change to RPI: No liabilities reduction

  • Action needed to mitigate inflation risk on defined benefit pensions as expected change to RPI calculation was not made
  • Action could include: inflation hedges and changing rules to CPI
[19-03-2013]

Funding defined benefit pension schemes: consultation on smoothing

  • Smoothing would give more stable funding results but could mask underlying problems and risks
[27-01-2013]

Workplace pensions – government’s plans

  • Government has set out vision in: Reinvigorating pensions
  • It introduces the ‘defined ambition’ model; suggests change to investment manager charges; supports streamlined regulation
[08-01-2013]

VAT paid by pension funds – reclaims

  • A number of legal cases could see a revision of VAT treatment on management fees – schemes may be eligible for VAT claims
[08-01-2013]

Tax relief for pensions – further reductions

  • Pensions’ tax relief reduced to £40,000 from 6 April 2014
  • Lifetime allowance down from £1.5m to £1.25m
[07-01-2013]

Directive expected to require stronger capital requirements for pension schemes

  • Draft legislation from EIOPA expected this summer
  • UK regulator responded to the impact study – voiced concern that proposals will cause misstatements of sponsoring companies’ value
  • Direction established but uncertainty on timing and process
[07-01-2013]