The CutRSS

Introducing Pensions Expert's blog – cutting through the industry noise to provide a regular dose of data, regulatory updates and comment on the issues facing UK workplace pension schemes.

Data needn't be a pain – if it has a strategy

Duncan Howorth

From the blog: To say that data quality is poor in both occupational and other forms of pensions is an understatement.

 

In the world of defined benefits in particular, having the right data has operated on a 'needs must' basis rather than consistent maintenance.

 

The result? Lengthy delays and an unacceptable lack of preparedness.

  

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Time to retire prejudice in the pensions sector

Steve Wardlaw

From the blog: John Walker is fighting for something very simple: that when he dies, his surviving spouse – a man – should receive the same pension benefits as if he were a woman.

 

In calculating spousal benefits for same-sex couples, private sector employer pension schemes are currently only required to take into account contributions made after December 2005, when civil partnerships became legal.

 

If Walker married a woman tomorrow, she would get half his full £85,000 per year pension when he dies, while his husband is in line for only £500. As he says, ‘It’s not just unfair, it’s absurd’.

 

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Complexity is rife - and no one is benefiting

Oliver Jaegermann

From the blog: Asset owners are struggling to balance the growing complexity with the governance needed to oversee their assets effectively.

 

This has been highlighted in a recent survey, which shows that a majority of trustees agree monitoring assets has become more difficult and are finding their roles more challenging than before.

 

The research raises questions about how the institutional asset management model is currently organised.

  

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How has DB changed in 20 years?

Matthew Arends

From the blog: April 2017 saw the 20th anniversary of the introduction of scheme actuaries. I don't expect there were many parties in celebration, but it made me think about how scheme actuaries, and defined benefit pensions, have changed over 20 years and what might happen next.

 

In 1997, 86 per cent of respondents ran a DB scheme.

 

By 2017, over half of respondents had frozen their DB schemes – underlining how the role of scheme actuaries (and trustees) is shifting towards schemes in run-off.

 

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The mother of all wash-ups

Angus Peters

From the blog: Perhaps it would have been helpful of Theresa May and her cabinet to give a little more thought to the progress of current legislation before taking the country to the polls.

 

Alongside a steadfast refusal to confirm her party’s stance on the state pension triple lock, the prime minister has now issued a pledge to strengthen the Pensions Regulator against "irresponsible" bosses.

 

But a string of new measures have been thrown into jeopardy by purdah and the 'wash-up' period that precedes it.

 

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Pension schemes need to rethink portfolio construction

Barber, Jill (teaser)

From the blog: Traditionally, for pension funds to provide a secure income in retirement, investments were viewed through an asset class lens.

 

Fixed income delivered the safe income, while equity exposure provided the growth engine within the portfolio.

 

And over time we saw the addition of alternative assets classes such as property, infrastructure and hedge funds as they developed.

 

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Why you should look again at LDI

Shajahan Alam

From the blog: Anecdotal evidence says many UK pension schemes have earnestly considered LDI yet not actually invested. But why? Let’s look at some of the reasons that may be causing those schemes to sit on the sidelines.

 

Despite the common view that yields are too low and will rise in due course, the long-term history of UK gilt yields shows a dramatically different possibility – that the high yields in the 1970s and 1990s were not the norm.

  

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The risks of poor data governance

Claire Court

From the blog: Just when personal pension scheme administrators thought they understood and could confidently respond to the Financial Conduct Authority’s reporting requirements on members’ use of pension freedoms, the goalposts have been moved again.

 

An email sent to firms by the FCA’s market intelligence and data analysis department in February outlined changes to reporting requirements for the six months ending March 31 2017.

 

While there are a number of ‘improvements’ to the type and format of the data requested, it still gave those firms barely two months to both check their data are in order and then work out how best to analyse these and respond.

 

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Raising debt to fund pensions - what to bear in mind

Jacqui Woodward

From the blog: FTSE engineering company GKN might consider issuing bonds of up to £250m in order to help finance its UK pension deficit, it has recently been reported in the Times.

  

If the company were to fund the schemes’ deficits via the issue of bonds, it would be swapping one form of debt for another.

 

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Hard times? Brexit and your scheme

Liam Mayne

From the blog: The implications of Brexit are likely to affect almost every facet of the wider economy. 

 

Brexit could see a more liberal regulatory regime for UK pension schemes.

 

For example, changes that arise from the DB green paper may benefit from not having to satisfy EU constraints in the long term.

 

Click here to read the full blog post

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