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The Pensions Regulator (TPR) is the body responsible for regulating workplace pension schemes in the UK. Where an employer operates a defined benefit trust-based pension scheme for its employees, legislation requires it to notify TPR if certain events occur. Some events must always be notified, while others only need to be notified in certain circumstances.

Defined benefit (DB) pension schemes promise their members a pension for life. However, while one member may live to age 75, another might live to age 95. When working out how much money a DB scheme needs to fund the benefits it has promised members, trustees (or rather their actuarial advisers) therefore have to make an assumption about how long, on average, members will live – a longevity assumption.

If that longevity assumption proves to be incorrect and the scheme has to pay benefits for longer than expected, the trustees will need to find additional money to fund those benefits. And usually they will look to the scheme’s sponsoring employer for that money.

Finding ways of managing a scheme’s longevity risk is therefore beneficial for both the trustees and the employer. One way of doing this is a transaction called a longevity swap. Between 2009 and 2018, nearly 50 pension schemes entered into longevity swaps, including schemes sponsored by Astra Zeneca, AkzoNobel, BA, BAE Systems, BMW, BT, Heineken, ITV and Rolls-Royce.


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On 6 April, the quality requirements that pension schemes being used for automatic enrolment (“qualifying schemes”) must meet are changing.

DC schemes – what’s changing?

At present, for a DC scheme to be a qualifying scheme:

  • The employer must make a contribution of at least 2% of the worker’s qualifying earnings.
  • The total contributions paid

Employers and trustees who use a guarantee or charge to reduce their pension scheme’s Pension Protection Fund (PPF) levy may need to re-execute that guarantee/charge in order for it to be taken into account in calculating the scheme’s 2019/20 PPF levy.

The PPF provides protection for members of DB pension schemes whose sponsoring employer becomes insolvent. It is funded in part by an annual levy payable by DB pension schemes.


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