July 2020

29Jul

UK. FCA Decides Not to Implement EIOPA Guidelines in United Kingdom

The UK Financial Conduct Authority (FCA) announced on July 8 that the guidelines issued by the European Insurance and Occupational Pension Authority (EIOPA) on outsourcing to cloud service providers are not applicable to regulated activities (in this instance, insurance and reinsurance undertakings) within the UK jurisdiction. In its statement, the FCA noted that this is due to the fact that the EIOPA guidelines will enter into force on January 1, 2021, which is after the end of the EU...

July 29, 2020
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28Jul

UK. Pension savers remain cautious during Coronavirus pandemic

The number of pension savers choosing to drawdown money from their pension fell by 42% in April 2020 compared to the same month last year. The latest data published by trade body the Association of British Insurers (ABI) has also shown the number of people taking a tax-free lump from their pension more than halved (-53%), while those withdrawing their entire pension fell by 30%. Figures for March 2020 had already started to show this cautious trend, as 15%...

July 28, 2020
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27Jul

Will post-Brexit pensions be driven by purpose or profit?

Is the City facing into a more purposeful future driven by greater transition to sustainable incomes for its populous, or a new panacea of deregulation to compete globally? Read also: UK pension scheme NEST tightens climate change policy. Direction needs momentum, which is contingent on politics and trade deals. Indeed, many hope the UK might emerge as a fiduciary leader; yet the certainty of whether the UK deregulates or gold-plates in a post-lockdown-post-Brexit world is capricious. For example, the key...

July 27, 2020
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22Jul

UK. Impact of COVID-19 on life expectancy could reduce pension scheme liabilities by up to £90bn

Impact of COVID-19 on life expectancy could reduce pension scheme liabilities by up to £90bn New XPS forecasting shows long-term vulnerabilities in pension schemes following the pandemic. In some scenarios the long-term economic impact of COVID-19 on life expectancy could be 50% higher than the short-term impact of the pandemic. The economic impact on schemes' assets is also a significant consideration. Especially for those schemes holding growth assets and/or with low hedging ratios. Read also UK. Cybercrime and Pensions...

July 22, 2020
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21Jul

UK. Cybercrime and Pensions Administration

In 2019, cybercrime and fraud constituted 42% of all criminal activity. With the advances in technology the whole of society is experiencing, its no surprise that crime is evolving too.. We need to be alive to the fact pension schemes and administration providers are attractive to cybercriminals. Partly because of all the personal data processed but also because of the importance of ensuring pension payments continue uninterrupted, as well as the potential of ransomware attacks. Information released by the...

July 21, 2020
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17Jul

Public sector pension discrimination could cost UK taxpayer £17bn

The government has revealed it faces a £17bn bill for tackling “unlawful” age discrimination in public sector pensions, with 3 million people set to benefit by an average of more than £5,600 each. While the announcement spells good news for many teachers, nurses, police officers, firefighters and civil servants, commentators said the huge bill could not have come at a worse time and would almost certainly have to be financed through cuts in spending or higher taxes. Taxpayers are...

July 17, 2020
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16Jul

UK. Govt’s ‘landmark’ pensions bill proceeds to Commons

The Pension Schemes Bill, which includes rules for pension dashboards and new powers for the Pensions Regulator, has cleared its first hurdle in the House of Lords. Read also UK. Does benchmarking DB transfers against a workplace pension make sense? The bill, originally announced in the October Queen’s Speech, will now pass into the House of Commons where MPs will debate its measures before it receives Royal Assent and is written into law. Read also UK. Proposed Legislation for Losses...

July 16, 2020
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14Jul

UK. Does benchmarking DB transfers against a workplace pension make sense?

Under new rules to be introduced from 1st October, IFAs who are recommending a transfer out of a DB pension will need to benchmark the proposed destination for the funds against a low-cost workplace pension. But many of these workplace pensions were designed for automatic enrolment and regular contributions by active members rather than large transfers in from Defined Benefit (DB) pension schemes by members approaching retirement. New analysis from consultants LCP based on a survey of master trusts...

July 14, 2020
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14Jul

UK. Proposed Legislation for Losses from COVID-19 and Limitations on the Retroactive Impairment of Contracts

The COVID-19 pandemic has caused most businesses to temporarily close and, as a result, sustain significant losses. Various states are contemplating the passage of legislation to require carriers to cover claims arising from COVID-19, but case law regarding the constitutionality of such legislation is conflicting. Depending on the facts surrounding retroactive legislation, states may be able to pass an enforceable law leading to coverage. Pennsylvania’s Proposed Legislation for Business Interruption Losses Pennsylvania is one of many states that has...

July 14, 2020
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10Jul

Financial System Requirements for Successful Pension Reform

By David P. Blake This paper examines the financial system prerequisites needed for the successful delivery of funded private pensions. In particular, it examines the financial instruments and investment strategies required during both the accumulation and decumulation stages. It does so within the context of a specific developed economy with a mature pension system, namely the United Kingdom. The lessons learned can help to inform the debate in developing countries that are in the process of undertaking pension reform....

July 10, 2020
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