Atkin trustees, actuaries, consultants & administrators

Current issues - December 2016

Integrated Risk Management (IRM): TPR issues a quick guide to help Trustees understand IRM and how it should apply to their Scheme. Many Schemes will already be applying the principles of IRM but perhaps without formally considering and documenting how the different risks interact. Running through this process can not only help Trustees to understand the risks that they are running and how they might be managed but, also, how their long term objectives might be achieved more efficiently by making changes to the investment strategy and considering liability management exercises. If this is an area you would like to explore further, then please give me a call.

Thwarting pension scams: The Government is considering taking a harder line to protect members from pension scams, although actual policing is likely to still to fall on Schemes.

RPI or CPI: In a blow to Schemes which were exploring whether CPI could be applied under their Scheme rules, the Court of Appeal have rejected Barnado’s interpretation that CPI could be applied. Although it is difficult to draw conclusions from this case (which was dependant on interpretation of precise wording of the Rules), it shows that Schemes and their sponsors should be sure of their position before pursuing these types of cases. On a more positive note, a government paper is expected in 2017 that may include a consultation on making it easier for schemes to switch from RPI to CPI.

In other ‘inflationary’ news, CPIH (a measure of CPI that includes housing costs) will become the Government’s preferred measure of consumer price inflation from March 2017. It is possible that these will be adopted for statutory pension revaluation, with CPIH running at around 0.2 to 0.3 percentage points higher than that of CPI for the last couple of years. If this is expected to continue this could increase the value of pension schemes liabilities.

GMP Equalisation: The Government has issued a consultation paper on a proposed solution as to how GMP equalisation might be addressed. Although legislation to require GMP equalisation (and all the additional costs this might entail) has not, so far, been mooted it is, perhaps, a step closer. The consultation runs until 15th January and we would be happy to capture any comments you might want us to pass on.

TPR and record keeping: TPR has announced that trustees will have to report on record-keeping in their annual Scheme Returns and is likely to engage with schemes that appear to be making little or no progress in dealing with errors and omissions in the data held. It would therefore be sensible to check with your advisors how the scheme data compares against TPR targets.

 

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We believe that Atkin & Co take the burden of administration away from the trustees and feel confident that the work is completed by competent and knowledgeable staff. We would recommend them as an excellent service provider.

Abigail Watts, Pitman Trustees