Press Releases

DB pension scheme trustees should be careful to focus on the detail in insurance firms’ Taskforce on Climate-Related Financial Disclosures (TCFD) reports, when selecting a firm for risk transfer, warns Hymans Robertson, as it launches its latest report: Spotlight: Insurer TCFD reporting and net zero targets.

Following today’s announcement about the delivery of the Pensions Dashboard, Paul Waters, Head of Digital Wealth, Hymans Robertson, says:

“The industry will welcome the additional time to deliver the pensions dashboards that the delay announced today offers. However, in reality it is pushing back even further the time for which consumers have the pension find and view service that is needed, as well as the resulting retirement guidance and support the industry can wrap around this...

2023 will see a paradigm shift in the pension scheme buy-in market with volumes expected to reach record highs for years to come, according to Hymans Robertson, as it issues its annual risk transfer report today. The leading pensions and financial services consultancy’s report shows a dramatic transformation in the market, with a tidal wave of demand leading to record buy-out volumes exceeding £50bn, with the potential to hit £70bn over the next few years.

DB Pension Scheme Trustees and sponsors are concerned about additional cost and time pressures from compliance activity, for the DB Funding Code launching later this year, warns Hymans Robertson. The results of polling at a recent webinar, held by the leading pensions and financial services consultancy, found that nearly half of trustees and sponsors (42%) are concerned about the additional governance challenges, and in turn associated costs, that the Code will bring.

Hymans Robertson, the leading pensions and financial services consultancy, has appointed Louise Lane to join its expanding Risk Transfer team as a response to increasing client demand. Louise joins from Willis Tower Watson’s (WTW) Risk Transfer team, where she focused on assisting clients to reduce the risk associated with DB pension schemes, primarily through the purchase of bulk annuities. Louise has worked and advised on a variety of transactions, ranging in value from £100m to almost £2bn in size.

The Citrus Pension Plan, one of the UK’s leading DB Master Trusts, has confirmed they have completed a c£6.5m buy-in with Legal & General for the Amey Services Section of the plan.

The transaction, covering all of the liabilities that the Amey Section holds within the Citrus Pension Plan Master Trust, has been described as a great success, further increasing the security of member benefits. The process the Citrus Plan has developed for insuring different sections’ benefits and the efficiency and leverage they are able to apply as a Master Trust were particularly important in securing excellent terms for a relatively small UK DB section.

Up to £250bn of DC assets could be committed to private equity investments by the end of the decade, according to the latest analysis from Hymans Robertson, as it warns a shift in mindset is required to meet this goal. Its Illiquid Investment Embracing the Opportunities paper published today, finds that significant allocations to private equity have the potential to improve retirement outcomes for DC savers by well in excess of 10% based on a consensus view of returns. The leading pensions and financial services firm found there is scope to introduce material allocations to illiquids assets more generally and radically improve the retirement outcomes for millions of savers.

Commenting on today’s 0.5% interest rate rise from the Bank of England, Chris Arcari, Head of Capital Markets, Hymans Robertson says:

“UK interest-rate expectations have fallen from the levels touched in the wake of September’s ‘mini-budget’ and reflect a little more tightening by the Monetary Policy Committee (MPC). We expect the MPC to pause soon, but even though the UK faces the worst 2023 growth outlook among the major advanced economies, the committee is likely to be cautious about easing policy while the labour market remains tight...

Hymans Robertson is warning that schemes are sleep walking into a de facto buy-out because of a lack of endgame strategy. The results of polling at a recent firm webinar on how to avoid this risk, found that the majority of those surveyed (87.8%) do not have a fully planned end game strategy with clear structured timeframes in place, leading to decisions being made almost by default. Further indication for the need for better endgame understanding was highlighted by a second poll which found that only half of those surveyed (56.7%) would buy-out now if they could.

Commenting on DWP Consultation, “Extending Opportunities for Collective Defined Contribution Pension Schemes”, Kathryn Fleming, Partner, Hymans Robertson says:

“This consultation is another step along the journey towards equipping pension providers with the tools to allow them to design decumulation solutions that can meet the needs of future DC savers. CDC in decumulation might not be the right solution for all DC savers, recognising that retirement needs are very personal and multi-layered. But, it will offer the exciting prospect of a solution that bridges the gap between the complete flexibility and risk of drawdown and the certainty but irreversible option that is offered by annuities. It is right that the conversation takes place now as the scale required to deliver these solutions is fast approaching.”

Commenting on the DWP consultation ‘Addressing the Challenge of Deferred small pots’ Michael Ambery, Partner, Hymans Robertson says:

“We are pleased to see today’s DWP consultation as part of a much broader opportunity to encourage better outcomes, increase engagement and develop better understanding for individuals and their pension needs. As an industry the role of automatic consolidation is to be welcomed given the level of change and transformation of this issue. This consultation, working with the pensions industry, will determine the best way to further increase engagement and couldn’t be more timely or relevant. The erosion of small pots, the advent of the Pensions Dashboard and low member engagement will be woven together to ensure change from this consultation as part of a higher level action plan, further protecting members and small pensions pots from becoming worthless.”

Commenting on the DWP Consultation, “Value for Money: A framework on metrics, standards, and disclosures”, Laura Andrikopoulos, Head of Governance, Hymans Robertson, says:

“We are pleased to see today’s consultation from the DWP, and it is clear that feedback from the pensions industry surrounding value for money (VFM) has been listened to and included reflecting previous concerns. The commitment to change thinking from cost focus to long-term outcomes is much welcomed, however we would like to see this go further and for the metrics approach to include consideration of explicit outcomes metrics. The long-overdue approach for small schemes and residual members is a strong signal that pleas for greater pragmatism and proportionality have been heeded. The lack of focus on governance while disappointing is understandable, with a metric approach still favoured and the issue of quantifying remaining a complex challenge for many...