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.

Avoid rear-view mirror driving

Matt Simms

From the blog: A lot of schemes use funding level triggers as part of a derisking journey.


Once a certain funding level is met you derisk by disinvesting from growth assets to add to the matching assets.


This reduces the level of risk of the investment strategy but also reduces the expected returns.


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A wishlist for the DC mastertrust code

Alice Honeywill

From the blog: The Pensions Regulator has said it will publish a draft code of practice and accompanying guidance relating to the new mastertrust authorisation regime, expected in the first quarter of this year.

The industry needs to know what the code will look like as soon as possible, in order to prepare for the imminent new regime.

Applications commence on October 1 2018, with six months for existing defined contribution mastertrusts to achieve authorisation.

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Fire, fury and GDPR

Girish Menezes

From the blog: Hell hath no fury like a lawyer or auditor scorned. The General Data Protection Regulation has unfortunately put the pensions industry in that dangerous position where we have to run a gauntlet, deciding how seriously to take the dire warnings of these two professional communities.


May 25 2018 trundles ever closer and we now have a far better view of what to expect.


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How to avoid pitfalls in DC bulk transfers

Kate Payne

From the blog: Pension freedoms, increasing governance demands and higher charges have led to considerable appetite among employers to transfer defined contribution pots to either a mastertrust or contract-based arrangement, but there are a number of hurdles that need to be overcome.


An actuarial certificate is currently still needed to confirm that benefits are no less favourable in the receiving scheme than the transferring scheme. 


And if there are deferred members whose pots are being transferred, then the requirement of a scheme relationship to the relevant employer can also be a stumbling block for such transfers.


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Has the interest rate hike affected annuities?

David Bird

From the blog: Planning for retirement is as important now as it has ever been. With the ageing workforce, interest rate hikes and the changing pension landscape, there are a lot of external factors weighing down on the retirement saving plans of savers. 


The retirement of the future is going to look very different to how it does today. So naturally, the question many people have is how much the November 2017 increase in the base rate will alter annuity pay-outs. The short of it: not as much as they would like.


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DB disputes: Solutions must be cost-efficient

Richard Bacon

From the blog: A number of important court cases involving defined benefit schemes are expected to be handed down in 2018.


At heart, each contains the same tension: a doubt regarding the interpretation or validity of a DB scheme’s governing documentation, which its sponsoring employer argues should be decided in a way that reduces the value of members’ benefits (and the cost of the scheme), and its members the opposite.


The scheme’s trustees will almost invariably be a third party.


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How negative cash flow will shape DB investments

Sorca Kelly-Scholte

From the blog: If there is one thing UK defined benefit schemes are not paying enough attention to, it’s cash flow. As many funds face the prospect of payments to retirees exceeding contribution income that is creating significant implications for investment strategies.


Negative cash flow status can be particularly painful for underfunded schemes.


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Dashboard: Timing, compulsion and engagement are crucial

Shaun Gomm

From the blog: People have, on average, 11 different pension pots over the course of their lifetime, making it a near-impossible task to keep track of them.


The pensions dashboard initiative therefore offers a fantastic opportunity to streamline this process, help consumers plan their retirement more effectively and go some way towards plugging the savings gap.


But there are still challenges and barriers that must be overcome if the project is to come to full fruition.


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The heat is on for a cold-calling ban

Sandra Wolf

From the blog: Frank Field’s call for action on cold-calling has reminded us of the fact that despite industry and government agreeing that savers need to be protected from scammers, precisely nothing has happened.


We might be tempted to look to the banking sector, where various rules apply depending on how cash was taken from someone’s account – via debit card, credit card or through identity theft.


However, if a transaction to scammers was authorised by an unsuspecting account holder, there too, little can be done to get the money back.


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Why CDC is fair to all generations

Con Keating

From the blog: The Work and Pensions Committee's inquiry into collective defined contribution has led to a welter of objections to the concept. Among these concerns, misconceptions abound. Some are even evident in the introduction to the inquiry offered by that committee. 


The critical element to understand is the role of the 'promise' in the design and construction of both CDC and collective defined benefit arrangements.


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