Press Releases

Annual DC pension contributions of a staggering 20% are needed for those earning £45k or more to reach the ‘comfortable’ [£33,600 per annum] level of the PLSA Retirement Living Standards according to analysis by Hymans Robertson in its latest research. Even the PLSA’s ‘moderate’ level appears unattainable for many, without an increase in contributions, the leading pensions and financial services firm warns.

Commenting on the impact of volatility in the gilts market and the impact on the de-risking market, Iain Pearce, Senior Risk Transfer Consultant, says:

“The UK has experienced unprecedented volatility in the gilts market in a ten days like no other. The market movements are consistent with extreme scenarios of models commonly used to manage pension scheme risks, and so have put pressure on LDI portfolios. These changes could be good or bad news for pension schemes looking to insure benefits, depending on their current levels of hedging and leverage. Schemes close to buy-out that are well hedged with low levels of leverage may be well placed to weather current market volatility, but may need to refresh their analysis following the material changes in markets. Pension schemes looking to insure a proportion of their liabilities will also need to take another look at their portfolio after the current volatility, which may result in some decisions to reduce the size or defer planned buy-ins. Schemes that are further away from buy-out with low levels of hedging will have seen a rapid improvement in their funding level and are likely to be executing plans to lock in these gains and accelerate their preparations for buy-out. We expect some transactions to slow down and others to accelerate as a result of this volatility."

Commenting on the past week and impact on the pensions and bond market, John Dickson, Senior Partner, Hymans Robertson says:

“As we approach the end of one of, if not the most, volatile weeks UK bond markets have ever experienced, it doesn’t feel like “unprecedented” quite does it justice.

“In my 30 years in the industry, I’ve experienced at least seven serious crash/systemic situations, the most recent of which, until last Friday, was the Covid19 pandemic. No two systemic events are ever the same, and that could not be more true when comparing the events of the global pandemic, which the world continues to recover from, and the very UK specific and systemic events of the last week or so..."

Commenting on the impact to the Pension Market following last week’s mini-budget, David Walker, Chief Investment Officer, Hymans Robertson says:

“This week’s unprecedented intervention from the Bank of England leading to the purchase of £5bn long-dated UK government bonds, highlighted the material risk to financial stability posed by dysfunction in the gilt markets, and the threat to UK financial stability..."

Commenting on the recommendations on how to solve the Gender Pensions Gap in the Work and Pensions Select Committee’s reporting on its Saving for Later Life Inquiry, Chris Noon, Partner, Hymans Robertson, says:

“We are very pleased to see that the Work and Pensions Select Committee has recognised the importance of reducing the inequality of the widening the Gender Pensions Gap. It is good to see them making the recommendation that the Government consider the case for moves such as a carer’s credit to their auto-enrolment pension. It is rightly also holding the Government to account by stating that ‘if it chooses not to do so, it must explain its alternative plan to address the gender pension gap mainly caused by labour market inequalities.’"

The combined reserves of the largest 40 charities in England & Wales that sponsor DB pensions schemes fell to £39.5bn in 2022 from £46bn in 2021. As the economic uncertainty continues this fall makes it more difficult for charities to fund their pensions deficits, according to analysis by Hymans Robertson. In the face of this fall, and as the sector faces potential difficulties with rising inflation and an economic downturn, charities need to consider how best to fund their pension schemes.

Hymans Robertson is today launching its 2022 national assessment gauging levels of knowledge and understanding in the LGPS. The leading pensions and financial services consultancy’s National Knowledge Assessment follows the success of its 2018’s National Confidence Assessment, and 2020 National Knowledge Assessment and provides LGPS funds with a clear insight into the knowledge levels of their key decision-makers on a national basis.

The ESG (Environmental, Social and Governance) capabilities of insurers, particularly those that cover bulk annuities, continues to move up the priority list that DB Trustees are looking at when assessing buy-in and buy-out risks, according to a new report by Hymans Robertson. The leading pensions and financial services consultancy warns, that while it is good to see that Trustees are looking at this area, they must be sure that they have a critical understanding of the role of ESG when their DB pensions scheme is targeting buy-ins and buy-out, to gain full benefit for their schemes.

Industry experts from Hymans Robertson give their comments and feedback on the key annoucements from the 2022 mini-Budget speech.

Hymans Robertson will launch its latest nationwide LGPS assessment of knowledge and understanding, one week today, on 28 September. The National Knowledge Assessment is an opportunity for LGPS funds to assess the knowledge levels of key decision-makers and compare these on a nationwide basis.

Nearly half of all DB pension schemes (45%) submitting valuations in 2021 lengthened their recovery plan end date, compared to just over a third (35%) the year before, according to the latest benchmarking analysis from Hymans Robertson. The first report on valuations post Covid-19, found that while markets recovered quickly from the initial shock of the pandemic, challenges remained.

Research undertaken by the leading pensions and financial services consultancy also reveals that the average recovery plan length has increased to 6.4 years from 5.9 years in 2021. Nevertheless, the recent rises in gilt yields are likely to have brought some good news for schemes with less hedging in place.

Hymans Robertson is pleased to have been listed as a signatory to the UK Stewardship Code for a second year. The acceptance of the leading pensions and financial services firm onto the list marks its continued commitment to advancing the importance of stewardship on client agendas, along with their stewardship capabilities.