Atkin trustees, actuaries, consultants & administrators

Current issues - September 2019

The Future of RPI:  The government has announced that a consultation into the calculation of RPI will be launched in January 2020.  It will consider aligning the calculation of RPI to CPIH, which has been consistently lower than RPI.  Although changes are unlikely to happen quickly, schemes and their sponsoring employers may wish to consider whether to make allowances now.

Bond Yields Decline – Impact on accounting disclosures:  Since 31 December 2018, the yield on high-quality corporate bonds has fallen and inflation expectations have increased which might be expected to increase the pension scheme liabilities shown on the company’s balance sheet by over 20%.  Although the increased liability may be offset by the performance of the investments (especially with a bond based LDI strategy) markets are likely to be volatile.  Companies may wish to discuss the possible impact on their year-end figures with their actuarial advisers now to understand the potential impact.

GMP Reconciliation – An update:  HMRC will send ‘final data cuts’ in November/December this year to all schemes that engaged with the Scheme Reconciliation Service.  For many schemes, this should bring to a close their GMP reconciliation exercises and it will be sensible for schemes to check what their advisors are intending to do to summarise the results.

PPF Levy invoices:  The start of September marks the beginning of the issue of PPF levies being to eligible schemes.  Trustees and companies are advised that they have only 28 days from the date of the invoice in which to raise an appeal.  Schemes or sponsoring employers that would genuinely struggle to pay the full amount of the levy within the mandatory 28-day deadline may request a ‘payment plan’.

Brexit – Dealing with member concerns: Schemes may want to consider providing their members with reassurances that Brexit is not expected to have a significant impact on benefits in payment.

 

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