Finance Matters

• 15Feb

  Material detriment code of practice published for consultation

  Pensions No Comments

  From The Pensions Regulator:

  The Pensions Regulator has today published its draft

  The material detriment test, introduced by the Pensions Act 2008, is a new test for contribution notices, based on whether a sponsor’s actions or failures have a materially detrimental effect on the likelihood of members receiving their benefits. 

  The code, which targets the new material detriment test, sets out the circumstances in which the regulator expects to use this new power. It aims to provide greater certainty on its use to help trustees, employers and other related parties to understand the practical application of the new ground for contribution notices.

  The new material detriment test will come into effect on commencement of the code of practice. The code will only relate to the new ground for contribution notices and has no impact on the other grounds, powers, clearance or scheme funding, which will continue…

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• 15Feb

  Recovery plans show positive trends in addressing pension deficits – but challenges ahead

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  From The Pensions Regulator:

  Positive steps have been made to address pension deficits through the scheme funding regime, and clearance activity is on a downward trend, data published today by the Pensions Regulator shows.

  “Trustees should not over-react in the face of the downturn, but should ensure they are active and alert to potential changes in the health of the sponsor, and to the funding level of the scheme. In responding to short-term cash flow difficulties trustees should first consider back-end loading recovery plans. Where valuations show a much larger deficit, then as we said in our October statement, this may result in longer recovery plans being proposed.  We will of course keep our approach under review as the situation develops.”

  Economic factors affecting recovery plans received over the next year will be very different. During this time the regulator expects to see:…

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• 15Feb

  Refreshed TKU code and guidance published for consultation

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  From The Pensions Regulator:

  The Pensions Regulator has refreshed the trustee knowledge and understanding framework to ensure it remains relevant, and is today publishing a draft revised code of practice and scope guidance for consultation.

  The revised code of practice sets out practical guidance for trustees in relation to the TKU regime, while the scope guidance provides trustees with a checklist of the topic areas of which they need to have knowledge and understanding. Both documents support those seeking to meet trustee knowledge and understanding requirements, introduced by the Pensions Act 2004.

  The consultation follows a review of the existing code of practice and scope guidance, undertaken to ensure that the TKU framework remains relevant for trustees. Changes reflect:

  Regulated community learning manager Terry Clayworth said: “The refreshed code and scope guidance reflect change…

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• 09Oct

  Guidance to help trustees calculate transfer values

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  From The Pensions Regulator:

  Having considered the responses to its consultation paper, the Pensions Regulator has today published final guidance to assist trustees in calculating

  From 1 October 2008, it will be the responsibility of trustees to take the decisions on which the calculation of cash equivalent transfer values (CETV) is based – as set out in government legislation. Previously, the calculation had to be certified by the scheme’s actuary.

  While many of the consultation responses have been taken into account for clarity in the final guidance, there are no new principles involved and its primary purpose is to assist trustees with their new responsibilities. The guidance covers:

  Chris Dobson, Pensions Regulator executive director of strategic development, said: “Trustees will need to produce transfer values appropriate for their scheme. We have produced this guidance to help trust…

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• 09Oct

  Regulator publishes response to longevity consultation

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  From The Pensions Regulator:

  The Pensions Regulator today published

  The regulator announced earlier this summer that, in response to feedback from the industry, it was deferring the introduction of its new approach. Today’s full response:

  Announcing the approach, Pensions Regulator chairman David Norgrove said: “Our consultation has sparked a lively and much-needed debate on the impact of longevity on pension scheme funding. We have listened with interest and taken on board the responses to our consultation.

  “Nobody is disputing the evidence on continuing mortality improvements – people are living longer and this will impact upon pension scheme costs. Despite some of the headlines, our focus is on achieving clarity over how pension schemes recognise the accrued costs of their existing liabilities – and not about identifying new costs or imposing new duties….

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• 23Sep

  Regulator confirms appointment of new executive director

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  From The Pensions Regulator:

  The Pensions Regulator today confirmed the appointment of Graham Brammer as a new executive director with lead responsibility for the design and delivery of the new employer duties contained in the current Pensions Bill.

  Mr Brammer will be taking up his new position today (15 September). He was formerly director, account servicing operations and board director of UK retail banking for the Barclays Group where he was responsible for leading several major transformation programmes, with overall responsibility for all retail banking operations (excluding mortgages) including global payment systems, payment operations to support over 10 million customers and Barclays’ ATM networks. He led a team of 3000 staff.

  Announcing the new appointment David Norgrove, the regulator’s chairman, said: “I am delighted that Graham Brammer is joining us to help to lead the design and delivery of o…

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• 02Sep

  Regulator confirms suspension of pension scheme trustee

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  From The Pensions Regulator:

  The Pensions Regulator today issued the following statement in relation to the suspension of GP Noble as trustee of a number of pension schemes:

  “We can confirm that the Pensions Regulator decided that it was appropriate to suspend GP Noble, and replace them as independent trustee, from a number of schemes. This was due to their actions in relation to certain schemes giving cause for concern.

  “We can confirm that members’ benefits are not at risk.

  “As these matters are subject to an ongoing investigation, and details of the case restricted information under the Pension Act 2004, we are unable to comment further at this time”…

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• 02Sep

  Draft guidance to help trustees calculate transfer values

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  From The Pensions Regulator:

  Draft

  A ‘cash equivalent transfer value’ is normally the expected cost to the scheme of providing the member’s accrued benefits. This value requires assumptions to be made about the future course of events affecting the scheme and the member’s benefits – factors including investment returns, mortality rates and inflation rates.

  The guidance aims to help DB scheme trustees understand and fulfil new responsibilities being introduced in regulations by the Department for Work and Pensions. From 1 October 2008, it will be the responsibility of the trustees to take the decisions on which the calculation of cash equivalent transfer values is based.

  The regulator’s draft guidance provides suggestions of good practice on the calculation of CETV, including calculations for schemes in wind up and dealing with enquiries in a PPF assessment period, and em…

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• 02Sep

  Regulator stresses importance of good record-keeping

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  From The Pensions Regulator:

  The Pensions Regulator has stressed the importance of good record-keeping in the governance of pension schemes in a

  The regulator acknowledges that there are some schemes and providers which achieve high standards. However, evidence suggests that there is certainly scope for improvement in standards of record-keeping, and that this is true irrespective of size or type of scheme. The main problem areas we have found include poor legacy data and limited appreciation of the importance of good record-keeping.

  Poor record-keeping can lead to significant additional costs in a number of areas, such as higher costs during buy-outs or wind-up, more expensive administration, claims from disgruntled members, and inaccurate actuarial valuations. These costs are ultimately borne by members, the employer, or both.

  The regulator’s consultation calls for views on some specific steps, to…

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• 02Sep

  Regulator listens on longevity

  Pensions No Comments

  From The Pensions Regulator:

  The Pensions Regulator today announced that, having listened to responses to its longevity consultation, it has decided to delay the introduction of changes to the way longevity is treated in the scheme funding regime.

  Changes will not now apply until the beginning of the next defined benefit scheme valuation cycle starting in September 2008. This will impact valuations, and follow-up recovery plans that must be submitted to the regulator by schemes in deficit, due from December 2009.

  The regulator issued a consultation in February this year seeking views on how it expects pension schemes to take account of future improvements on longevity. This had suggested introducing changes applying to valuations due from March 2007.

  Commenting on the change, David Norgrove, chairman of the regulator, said:

  More than 80 responses were received as…

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