The Pensions Regulator (the “Regulator”) has announced that it will not now consult on a revised defined benefit (“DB”) funding code of practice until late summer 2022.
The Regulator’s current code of practice on DB scheme funding came into force in 2014. In 2020, the Regulator carried out the first of
The High Court has held that directors of the sponsoring employer of two pension schemes did not, as trustees of those schemes, owe any fiduciary duties to the employer.
H and W were directors of a company and were trustees of the company’s main and executive pension schemes (the schemes). After H and W left
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.Continue Reading Managing pension scheme longevity risk – a good thing for schemes and employers
Recent intervention by the Competition and Markets Authority could lead to increased competition in the market for investment professionals who provide services to pension schemes – which should be a good thing for the employers supporting those schemes.
Many occupational pension schemes use the services of investment consultants and / or fiduciary managers. Broadly, investment consultants advise pension scheme trustees on how best to invest scheme assets – and fiduciary managers make investment decisions on behalf of pension scheme trustees.Continue Reading Pension scheme investment – a new era of increased competition?