Press Releases

“We welcome this forward-looking consultation from the DWP focusing on the future of defined contribution schemes. We believe that consolidation, if approached with individual member needs at the heart, can lead to better long-term retirement outcomes. Although this is a direction of travel we support, there is the risk that too quick a transition will not lead to better outcomes because we’ll lose some inability to learn from innovation."

Charities facing the financial strain from the pandemic could reduce their annual cash contribution to their DB pension schemes by between 35 and 65 per cent if they pledge security to their pension scheme and choose a bespoke funding plan under the proposed new DB funding regime rather than adopting the alternative fast track option, according to analysis by Hymans Robertson. In its annual report on DB pension funding in the charitable sector, the leading pensions and financial services consultancy found that charities could significantly reduce their pension cash contributions by pledging security to support a lower funding target or longer recovery plan.

Commenting on DWP’s Consultation ‘Taking action on climate risk: improving governance and reporting by occupational pension schemes’, Simon Jones, Head of Responsible Investment, Hymans Robertson says:

“We welcome the considerable efforts the DWP has made to create legislation and guidance that recognises the important role UK pension schemes need to play in combatting climate risk, and in supporting the UK Government in its ambitious, legally binding climate targets. It is evident the DWP has considered a diverse range of stakeholder feedback, and we are pleased with the majority of amendments made to the draft regulations which seek to clarify and simplify, and which include a number of our own suggestions.

DC Master Trust default funds have seen the value of investments shoot up over the last 12 months despite the market crash at the start of the pandemic, according to analysis from Hymans Robertson. Its latest Master Trust Default Fund Report shows that retirement outcomes for Master Trust pension scheme savers not only recovered but improved over the year.

“With many of the themes familiar from recent TPR guidance, nothing in today’s Annual Funding Statement should come as a huge surprise to trustees and employers. However, TPR outlines how defined benefit schemes should approach 2021 scheme valuations. As consultation on the new DB funding code continues it’s the best indication of how scheme funding will be regulated in the short term and what will attract scrutiny."

“We look forward to clarification from The Pensions Regulator on a number of areas in the new consolidated Code of Practice, particularly in the interaction between the requirement to demonstrate an Effective System of Governance and the annual requirement to report on the ‘Own Risk Assessment’ (ORA). The ORA as currently framed is a governance review of key policies and processes which are part of Trustee risk controls and which would be covered in any assessment of effective governance."

In the first five months of 2021, there have been much lower volumes of buy-ins and buy-outs than were expected by the insurers according to analysis by Hymans Robertson. Due to this quieter period there is likely to be strong price competition this year; schemes considering buy-in should move quickly to take advantage of this recommends the leading pensions and financial services consultancy.

Commenting in response to DWP’s consultation Pension scams: empowering trustees and protecting members, Peter Summers, TPA Head of Clients, Hymans Robertson says:

“We welcome today’s consultation on combatting Pensions Scams from the Department of Work and Pensions. We firmly believe that anything that can further protect pension scheme members from scams, and the corresponding physical and emotional fallout, can only be a positive thing. We remain cautiously optimistic on the consultation and look forward to reviewing further details on the proposed legislation as it emerges.”

It is now known that RPI will trend down to CPIH from 2030 following the Government’s announcement last November, however, market implied RPI does not reflect this expectation with no noticeable trend down predicted in 2030. This indicates that investors are currently paying a significant premium to hedge inflation, potentially of around 0.5 per cent per annum claims the leading pensions and financial services consultancy.

“Auto Enrolment has been an undoubted success and the increase of those contributing to a workplace pensions scheme from 20% in 2012 to nearly 80% in 2020 is testament to that. This is an important step in encouraging people to save more for the long term and think about their financial wellbeing. The fact that this has levelled off isn’t a surprise but work needs to be done to increase participation further, especially in those ages that fall below the edibility criteria and for those, especially women, in part time jobs where participation levels are much lower."

Schemes rushing to meet the June deadline for CMA compliance on the retender of Fiduciary Managers could cut corners leading to poorly negotiated fees and inappropriate mandates, warns Hymans Robertson.

Trustees making retender decisions solely based on time pressures could risk undertaking the process without a full commitment leading to poor outcomes for schemes. This means the assessment of the mandate and strongly negotiated fees may not be done thoroughly, claims the leading pensions and financial services firm.

Commenting in response to TPR’s Consultation on its Approach to the Investigation and Prosecution of the New Criminal Offences, Alistair Russell-Smith, Head of Corporate DB, Hymans Robertson, says:

“The approach set out by TPR appears to be broadly consistent with the policy intent to increase the deterrent for reckless conduct in relation to DB schemes, rather than to fundamentally change corporate norms or accepted standards of corporate behaviour. It is likely to increase the need for corporates to have a clearer audit trail of their decision making and rationale - it will force the DB scheme higher up the corporate agenda."