Look to the future

The words Europe and EU are sometimes used as synonyms, but Europe denotes more than a political structure formed just 60 years ago. Although Brits often refer to Europe as an entity separate from the UK, the county will – like it or not – continue to form part of the fabric of this so-called continent. The channel has not got wider overnight.

Little will change in the next two years, it has been said. What lies beyond is anyone’s guess and, dare I say it, I don’t think the prime minister knows either. However, the nation will not die without Brussels, even if some things might become more complicated.

For pension funds, the triggering of Article 50 could have both positive and negative effects, writes Barnett Waddingham’s Liam Mayne in a blog post on pensions-expert.com. Major headaches – such as the notorious GMP equalisation – could go, and the fall of sterling can bring exchange rate gains for some schemes.

On the downside, inflation is starting to rear its head, and uncertainty is pushing some schemes into low-risk assets, making for further tough sponsor negotiations for underfunded schemes.

Whether the UK is in or out, the regulatory ‘burden’ for pension schemes is unlikely to abate substantially after the BHS inquiry and defined benefit green paper – neither of which have all that much to do with EU red tape.

And you can apply to the end of this relationship what applies to all break-ups: don’t dwell on the past, look to the future.

Following this mantra, it is the prospects for the next generation that count, which depend on economics of course, but equally the education system.

The article on page nine asks whether apprenticeships can work for the pensions industry, and comes to some interesting conclusions. Alternative routes can turn out to be surprisingly rewarding – let's hope this will hold true for the UK as well.

Sandra Wolf is editor at Pensions Expert. You can follow her on Twitter @SandraCWK and the team @pensions_expert.