Occupational Pensions Opinion

A GROWING NUMBER OF FTSE 100 COMPANIES WITH DB SCHEMES ARE USING THEIR PROPERTY AND OTHER NON-CASH ASSETS TO HELP PLUG DEFICITS IN PENSION FUNDING. ONE CONSULTANT INVOLVED IN DESIGNING THESE, OFTEN COMPLEX, ARRANGEMENTS ESTIMATES THAT NON-CASH FUNDING COULD REDUCE SCHEME DEFICITS BY £10 BILLION THIS YEAR.

THE PENSIONS REGULATOR BELIEVES THAT THE SUCCESSFUL ADMINISTRATION OF PENSION SCHEMES RESTS ON HIGH STANDARDS OF RECORD-KEEPING AND DATA MEASUREMENT. DISAPPOINTED BY WHAT IT CONSIDERS TO BE A POOR RESPONSE TO ITS ORIGINAL INITIATIVE ON THE TOPIC, IT HAS PRODUCED REVISED GUIDANCE CONTAINING MORE STRINGENT REQUIREMENTS.

THE PENSIONS REGULATOR IS PLACING INCREASING EMPHASIS ON THE NEED FOR TRUSTEES TO MONITOR THE STRENGTH OF EMPLOYERS’ SUPPORT FOR THEIR PENSION SCHEMES. IN THE CONCLUDING PART OF OUR FEATURE ON ASSESSING THE STRENGTH OF THE EMPLOYER’S COVENANT, WE LOOK AT HOW TRUSTEES SHOULD APPROACH THE TASK AND CONSIDER SOME OF THE EXPERT HELP AVAILABLE TO THEM.

AS THE RISKS FACED BY DB SCHEMES ARE INCREASINGLY HIGHLIGHTED, THE PRESSURE ON TRUSTEES TO ASSESS THE STRENGTH OF THE EMPLOYER’S COVENANT HAS INTENSIFIED. IN THIS, THE FIRST OF A TWO-PART FEATURE ON THE SUBJECT, WE FOCUS ON THE PENSIONS REGULATOR’S REQUIREMENTS.

IN THE PAST 12 MONTHS FOUR ORGANISATIONS HAVE CONCLUDED SEVEN LONGEVITY SWAP DEALS COVERING LIABILITIES OF £6.4 BILLION. SUCH ARRANGEMENTS HOLD SOME ATTRACTIONS OVER BUY-INS AND BUYOUTS AS A MEANS OF REDUCING RISK FOR DB SCHEMES. OUR SURVEY LOOKS AT THE DEALS DONE SO FAR AND AT THE GROWING MARKET

THE GOVERNMENT PRESENTED defined-benefit (DB) schemes with another problem when Angela Eagle, the Minister for Pensions and the Ageing Society, made a short parliamentary statement1 announcing that all contracted- out schemes must make provision for the equalisation of guaranteed minimum pensions (GMPs). The issue has been bubbling under since the Department for Work and Pensions (DWP) raised the matter in respect of the Pension Protection Fund (PPF).