How will the Pension Schemes Bill shape pensions that are fit for the future?
Significant changes to the DB pensions world are afoot. How should sponsors respond to the new challenges? What do trustees need to do differently?
Welcome to our Pension Schemes Bill insight hub – the only place you need to look to find all you need to know about how these changes will impact you. Our technical experts will be covering this regulatory development and posting comment and insight here. See here for our News Alert which provides a technical analysis of the Pension Schemes Bill.
The rest of the hub is divided into three sections covering key issues that are important for all schemes and sponsors to consider now: Funding, Regulator Powers and DB Consolidators. Click on the images below to take you to each of these sections.
A new clearer funding regime
The Pension Schemes Bill introduces new requirements for sponsors and trustees to agree long term funding and investment strategies. The Pensions Regulator is consulting on the detail of the new regime, including proposing a twin regulatory approach: “fast track” and “bespoke”. Which will you be? For some this will be evolution; for others revolution – for some this is expected to result in a material increase in employer pension contributions and a reduction in investment risk – will this be you, and will you need to rethink the way you manage your pension scheme?
We're expecting to be able to comment in more detail once the Pensions Regulator launches their first consultation on the principles of their proposed new Funding Code which is expected in early March 2020 and this will be published here. In the meantime, our latest thoughts on what we are expecting from the new funding and investment regime can be found below.
The return of the Pension Schemes Bill raises a number of questions for scheme sponsors. Could contingent funding bridge the gap?
A scheme’s long-term funding target is key, however the journey can be equally important and should be planned and managed well to maximise the chances of success. In our latest report we bring together investment, covenant and funding advice and how each of these interactions help identify risks and help your pension scheme weather a storm.
19 December 2019
Following the Government’s 2018 White Paper, the Pensions Regulator (TPR) has been ramping up its guidance on how schemes should be funded and managed – the Annual Funding statements of 2018 and 2019 as well as more recent TPR blogs have clearly signalled a direction of travel toward a new world of DB pensions regulation and oversight.
New Pensions Regulator powers
Following criticism in cases like BHS and Carillion, the Pensions Regulator is set to get extensive new powers under the Pension Schemes Bill. These include powers to impose Contribution Notices on companies or directors more easily – requiring them to make one-off and substantial contributions to pension schemes. They also include powers to send anyone to jail who acts in a way to increase the likelihood that pension benefits won’t be paid. This will require new governance approaches from companies and trustees to ensure “at risk” events are identified and appropriate action is taken.
In this blog, Jonathan Camfield explores new upcoming regulator powers and the material impact this will have on corporate sponsor and trustee behaviours.
The Pension Schemes Bill will significantly increase the Pensions Regulator’s powers and further add to the obligations of companies that sponsor DB schemes and the trustees of those schemes. Directors and trustees will need to take legal and other specialist advice to ensure they don’t fall foul of the new regime, as the penalties are severe in some cases, including unlimited fines and up to 7 years in jail.
8 January 2020
A new pension consolidator regime
As it goes through Parliament, we hope the Pension Schemes Bill will be extended to include detail of the promised regime for the authorisation and supervision of DB consolidators. Could this be a solution for your scheme and improve the chance that your members’ pension benefits are paid?
Could pension scheme members be better off in a Consolidator? How can companies and trustees decide? We have developed a sophisticated model which can provide the analysis you need to make a clear and informed decision.
4 December 2019
In this blog, Jonathan Wolff discusses what moving into a consolidator means for employer covenant.
Join us on 30 June 2020 to hear the latest on the developing DB consolidation market, and how you can make the right decisions to achieve a transaction where suitable.
10 January 2020