June 2023
22Jun

UK. Pension policy risks being ‘stuck in a previous era’

  Pension policy risks being 'stuck in a previous era' rather than reflecting the realities of scheme funding levels today, according to LCP partner Steve Webb. Giving evidence to the Work and Pensions Select Committee, Webb pointed out that back in 2014. the combined deficit of DB pension schemes stood at nearly £400bn. This is in stark contrast to the latest figures which show a surplus of over £400bn. "For many of our clients, the issues we are now discussing are about managing...

June 22, 2023
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16Jun

US. DOL working on updated fiduciary rule, SECURE 2.0 provisions

The Department of Labor's Employee Benefits Security Administration is aiming to release a rule proposal on fiduciary investment advice in the coming months and is working on a host of rules related to SECURE 2.0, according to its latest semiannual regulatory agenda. The agenda outlines EBSA's short-term and long-term priorities and notes it's working on seven items in the pre-rule stage, 10 in the proposed rule stage and three in the final rule stage. EBSA agendas in recent years have indicated...

June 16, 2023
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16Jun

UK. BOE Issues Fresh Warning Over Risks in Pension Transfers

The Bank of England has warned firms offloading pensions in a multibillion-pound market that they need to improve the way they manage reinsurance risks. The Prudential Regulation Authority, part of the BOE, wrote to life insurers on Thursday to highlight its concerns about the use of “funded reinsurance,” where insurers pay upfront to transfer the risk of pensioners living longer to another firm. If one of the major reinsurers were to fail, the original insurer could be exposed to “sub-optimal portfolios”...

June 16, 2023
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14Jun

US. GOP bill aims to block ERISA plans from funding firms linked to U.S. adversaries

Rep. Jim Banks, R-Ind., introduced a bill to block ERISA-governed retirement plans from making new investments in companies controlled by or based in Iran, North Korea, Russia and China. "Several states, including my home state of Indiana, divested their pension funds from China, but federally regulated ERISA plans continue to fund firms that are building up the People's Liberation Army, stealing U.S. intellectual property and participating in the Uyghur genocide," said Mr. Banks, who serves on the Select Committee on...

June 14, 2023
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14Jun

UK. Govt extends National Insurance contribution deadline

The government has extended the deadline for paying voluntary National Insurance contributions by nearly two years, with taxpayers to be given until 5 April 2025 to boost their state pension entitlement. According to the government announcement, the extension aims to ensure that people have more time to properly consider whether paying voluntary contributions is right for them and ensure that no-one misses out on the possibility of boosting their state pension entitlements. The original deadline was extended to 31 July 2023...

June 14, 2023
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09Jun

Sustainability of pension schemes. Building a smooth automatic balance mechanism with an application to the US social security

By Frédéric Gannon, Florence Legros & Vincent Touzé We build a “smooth” automatic balancing mecanism (S-ABM) which would result from an optimal tradeoff between increasing the receipts and reducing the expenditures of a pension scheme. The S-ABM obtains from minimizing a sum of discounted quadratic loss function under the constraint of an intertemporal budget balance. One advantage of this model of “optimal” adjustment is its ability to analyse various configurations in terms of ABMs by controlling the adjustment pace. Notably,...

June 9, 2023
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07Jun

US. DOL took thumb ‘off the scale’ in finalizing new ESG rule, official says

Despite mischaracterizations and political backlash, the Department of Labor's new rule permitting retirement plan fiduciaries to consider environmental, social and governance factors when selecting investments and exercising shareholder rights does not tip the balance in favor of ESG, a key department official said Tuesday. "The final rule that we put out, notwithstanding what you may have heard, doesn't require consideration of ESG, it doesn't mandate that every investment have an ESG score attached to it, it doesn't mandate that if...

June 7, 2023
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07Jun

The Irish pension landscape for employers in 2023

Pension provision for staff is a valuable recruitment and retention tool for employers. Pensions can be a core part of a benefits and reward package offered. When there are labour or skills shortage affecting your hiring capabilities, this can be a meaningful part of your offering to ensure you are competing with top employers for talent. IORP II The IORP II Directive “sets common standards by ensuring the soundness of occupational pensions and better protecting pension scheme members and their beneficiaries.” Employers...

June 7, 2023
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05Jun

How the FCA’s new Consumer Duty impacts UK pension scheme buy-outs

Pension scheme trustees considering a buy-out are likely to welcome this, because the Duty will require the insurer to use its influence to deliver good outcomes for the members in relation to the policies. This will further strengthen the regulatory regime that applies to insurers and the protection it offers to bought out members. How the Consumer Duty will apply to pension schemes In July 2022, the FCA published its rules for a new Consumer Duty that will apply to FCA-regulated...

June 5, 2023
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May 2023
25May

Changing pensions regulations will not boost UK business investment Expert

Often in politics, a bad idea turns up when its time has finally come. The current contender in the UK is the belief that a few tweaks to pension rules will flood dynamic companies with much-needed funds, save the troubled stock market, improve returns for future pensioners and resolve the longstanding weakness in business investment. Chancellor Jeremy Hunt said in his March Budget that his plans, to be announced in the autumn, will “unlock productive investment from defined contribution pension...

May 25, 2023
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