Atkin trustees, actuaries, consultants & administrators

Current Issues - August 2016

Dumping pension schemes; an interesting paper on how value in the sponsoring employer might be eroded and therefore examples of what Trustees should watch out for.

Cut in interest rates and Gilt Yields: Gilt yields have fallen again, potentially pushing up the deficits for schemes that have not fully matched out their exposure to gilt yields and making the prospect of gilt reversion (i.e. a return to historically more ‘normal’ yields) less likely in the near future. Schemes that have not matched their exposure to interest rates may want to review how they derive their discount rate for assessing the funding position as a gilts based approach may not be appropriate.

GMP equalisation: the union representing Lloyds Bank employees is putting together a class action lawsuit on behalf of female pension scheme members to force the equalisation of GMP. Depending on the result, Schemes may be forced to reconsider this issue.

Pension introducers – the FCA acts: we are seeing an upsurge in the numbers of members asking for transfers with the apparent intention of transferring into esoteric and questionable investments. You may want to check with your administrators their experience and that they have appropriate procedures in place.

BHS fall out: the Work and Pensions Committee have launched a far reaching review of final salary pension schemes, including the calculation of the PPF of levy. Written submissions need to be submitted by 23 September 2016. We are discussing internally whether to submit a response and would be happy to capture any thoughts you might have.

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