Press Releases

Hymans Robertson, the leading pensions and financial services consultancy, has appointed Iain Pearce to Head of Alternative Risk Transfer Solutions. Iain will lead the firm’s advisory service supporting DB pension scheme trustees and sponsors and market participants considering new and emerging risk transfer options. These include superfunds, capital backed solutions and alternative insurance products.

A UK pension scheme (“the Scheme”) that is sponsored by one of the largest Fortune 500 Companies has completed a £150m full scheme buy-in. This transaction fully insures the benefits for all of the Scheme’s 400 pensioner and deferred members and is expected to be converted to buy-out in the short term.

20-20 Trustees are the sole trustee for the Scheme and they engaged Hymans Robertson to act as lead transaction adviser, with legal advice provided by Gowling WLG and Aon providing the Scheme Actuary and investment advisor roles and XPS the Scheme administrator.

£15bn in deficit contributions could be collectively saved by FTSE 350 companies choosing the Bespoke funding route under TPR’s proposed new TPR funding regime, according to analysis in Hymans Robertson’s annual FTSE 350 DB Report.   The report shows that 40% of FTSE 350 companies should consider this strategy, with the remaining 60% already sufficiently well-funded to instead follow TPR’s Fast Track approach with their existing funding strategy.  The leading pensions and financial services consultancy calls on corporates to start considering and preparing for the route they will take as a priority, and to seriously consider whether the Bespoke route is a viable option, given the savings that could be made.

Climate risk could add £25bn of additional deficit risk to FTSE350 pension liabilities over the next 15 years according to Hymans Robertson in its annual FTSE 350 analysis. To prevent this massive increase in liabilities, climate risk needs to be built into DB funding strategies, claims the leading pensions and financial services consultancy. Funding strategies need to be adopted that minimise the impact of climate risk on pension scheme assets and liabilities, and employer covenants it warns.

Commenting on her hopes for 2022 for DB Pensions Schemes, Susan McIlvogue, Head of DB Pensions, Hymans Robertson says:

“We expect DB schemes to face a number of governance challenges in 2022, many of which are linked to the Pension Schemes Act 2021. New regulatory powers and notifiable events—backed by significant fines and criminal offences—will encourage sponsors to think differently. A green governance perspective will continue to build momentum, with more schemes affected by climate-change reporting obligations. The delayed single Code of Practice will come into force as early as summer next year, meaning a significant ramping up of governance polices and processes. On top of this, 2022 looks set to be the year when most schemes tackle GMP equalisation in earnest."

DC Master Trust default funds have retained the growth they experienced in early 2021 and have maintained that position since, according to analysis from Hymans Robertson in its latest Master Trust Default Fund Report. After the crashing lows funds experienced at the start of the pandemic this is encouraging for Master Trust members claims the leading pensions and financial services consultancy. While retirement outcomes for Master Trust remaining steady, however, they are subject to concerns around inflation, a continuing increasing cost of living, and the impact on salary growth warns the firm.

Commenting in response to the FCA and TPR’s ‘Driving Value for Money in Defined Contribution Pensions’ consultation closing this week, Claire Kapitan, DC Consultant, Hymans Robertson says:

“We agree with the ambition that this joint discussion paper from TPR and the FCA is trying to achieve. Value for money is a key consideration and pivotal in delivering good outcomes for members. Value, however is not simply about costs and charges. Costs and charges are, of course, important but not if the overall quality and suitability of service or performance is poor."

Up to 40% of default assets could be allocated to illiquid investments by DC schemes for younger members, improving their outcomes, according to analysis from Hymans Robertson in its Illiquid Investment for DC Schemes paper published today. Maximising the potential will require supportive legislation, regulation and guidance with the development of an investment strategy anchored to improving member outcomes, warns the leading pensions and financial services consultancy.

Commenting on today’s open DWP consultation ‘Enabling investment in productive finance’ Brenda Kite, DC Provider and Platform Solutions Lead, Hymans Robertson, says:

“Today’s announcement from the DWP to increase investing by DC schemes in illiquid assets, such as infrastructure and private equity, can improve retirement outcomes for DC members - both by diversifying the sources of investment growth and the ability to more directly influence the move to a low-carbon economy. However, we do not believe that allowing performance related fees for illiquid assets within the charge cap will be the “game-changer” the government hopes."

Commenting on TPR’s announcement that Clara-Pensions has been cleared to accept transfers, Iain Pearce, Senior Risk Transfer Consultant, Hymans Robertson, says:

“This is a landmark day in the history of defined benefit pensions as it opens up a new endgame for schemes that has not previously existed. This will provide more options to protect members’ benefits, especially for those schemes where there are significant doubts about their ability to be able to insure benefits in full at some point. Since The Pensions Regulator (“TPR”) released its guidance for superfunds over a year ago Clara-Pensions has been working hard to support the diligent assessment by TPR against this guidance and has now been added to the TPR website confirming that it has completed this assessment."

A lack of understanding about ‘company beliefs’ and how they impact decision making around pensions schemes could endanger the success of DB endgame strategies claims Hymans Robertson. The leading pensions and financial services consultancy warns that as these beliefs shape company decisions it’s imperative for them to align with strategic pensions choices. It’s worried that this is being neglected and can lead to unnecessary and damaging misunderstanding between sponsors and trustees.

Commenting on the concluded DWP Consultation ‘Permitted charges within Defined Contribution pensions schemes’ Michael Ambery, Partner says:

“We are pleased to see that today’s Consultation, Permitted charges within DC pensions schemes, has protected small pension pots from erosion and becoming worthless. This commitment will protect those with relatively small pots having these diminished by investment charges. However, we question whether this goes far enough, and believe £100 remains a very small protection value and relatively insignificant in respect of the de minimis level. This level could have been much larger and should be reviewed for relevance to afford pension savers much greater protection. We remain concerned that the operational impact of changes to protect members leaves the administration and provider teams little time to ensure protections are in place.