October 2022
05Oct

UK. Renewed focus on pension fund investment strategy following Bank of England’s intervention in gilt market

The ramifications of the Bank of England's urgent purchasing of government bonds are being felt by pension funds and some insurance firms. The upheaval in gilt (UK government bond) markets that led to last week's spectacular intervention from the Bank of England continues to reverberate. The Bank was obliged to buy long-dated gilts - those with a maturity of 20 or 30 years - on Wednesday last week following a wave of forced selling by pension funds. Those pension funds had been...

October 5, 2022
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03Oct

MPs to inquire into pensions strategy behind UK market sell-off

MPs are to probe the pensions regulator over its role in supervising thousands of pension plans that were this week left teetering on the edge of default following unprecedented market turmoil. The work and pensions committee said on Sunday that it intended to write to The Pensions Regulator, which supervises about 5,200 corporate defined benefit plans that deliver a secure income to around 10mn members. Thousands of pension plans that had used derivatives contracts to mitigate the impact of movements in...

October 3, 2022
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03Oct

Integrating sustainability in DC pensions

Workplace pensions are an integral part of the social infrastructure in our society, and most workplace pensions are now defined contribution schemes (DC). In contrast to the defined benefit (DB) world, there is no sponsor underwriting scheme risks and no Pension Protection Fund to fall back upon; massive responsibilities rest upon the shoulders of scheme trustees. A further important differentiating factor is the relative maturity of the two markets. Today’s active contributors to DC schemes are likely to be still...

October 3, 2022
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September 2022
30Sep

Pension Insurance Corporation Group Limited. Annual Report and Accounts 2021

By Pension Insurance Corporation Group Limited PIC is a specialist insurer which has become a leader in the UK pension risk transfer market by focusing on our purpose: to pay the pensions of our current and future policyholders. We aim to balance the interests of all our stakeholders – policyholders, employees, shareholders, regulators and others – with excellence in customer service at the heart of what we do. Source @PensionCorporation 553 views

September 30, 2022
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29Sep

BoE’s £65bn move driven by pension fund panic

The Bank of England stepped in to calm markets after some types of pension funds were at risk of collapse. It pledged to buy £65bn of government bonds after Friday's mini-budget sparked turmoil on financial markets and the pound plunged. Investors had demanded a much higher return for investing in government bonds, causing some to halve in value. Pension funds, which invest in bonds, were forced to start selling, sparking fears of a fresh market downturn. The Bank said its decision to buy...

September 29, 2022
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28Sep

UK pensions hit with £100m margin calls as gilts and sterling slide

At least three LDI managers request emergency capital as others consider unwinds to avoid default. UK pension funds have been hit with variation margin calls of as much as £100 million ($107 million) each, after sharp falls in gilts and sterling pushed mark-to-market valuations on derivatives and leveraged repo positions heavily against them. Simeon Willis, chief investment officer of consultancy XPS Pensions Group, says he knows of three different fund managers running pooled pension portfolios that have requested emergency capital...

September 28, 2022
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27Sep

UK. Pension schemes and inflation

In the 12 months to August 2022, RPI has increased by 12.3% and CPI 9.9%. With this recent significant rise in inflation, employers and trustees have been asking what the impact of this is upon their defined benefit pension schemes. Members are also concerned that, against high inflation and a 'cost of living crisis, their pensions will maintain their value in real terms. Impact on benefits Defined benefit schemes The rapid rise in inflation means that members of defined benefit pension schemes...

September 27, 2022
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27Sep

UK. TPR reveals compliance and enforcement figures

Use of regulatory powers remained steady in most areas with some notable exceptions The Pensions Regulator has published its latest compliance and enforcement bulletin – showing how many times the regulator used its AE and frontline regulation powers between January and June this year. The watchdog said the use of powers had remained "broadly steady" since the previous bulletin covering the six-month period of July to December 2021 - with TPR using its powers 203 times during this period as opposed...

September 27, 2022
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23Sep

UK. Inflation presents ‘considerable risk’ to DC pension pots

Skyrocketing inflation figures pose unique challenges for defined contribution pension schemes as memberships surge to record highs, according to the Pensions Policy Institute’s DC Future Book. Though the state pension triple lock provides “partial protection” for those in retirement against inflation, the PPI warned that the cost of living crisis could be compounded if returns on investment do not match inflation, which would lead to erosion in the value of DC pots. Active DC membership now stands at 13.8mn people, 10.7mn...

September 23, 2022
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22Sep

UK Pension Schemes Under Pressure for Climate Impact Reporting

The mid-sized and smaller pension schemes in the UK are under tighter rules as new reporting regulations are requiring more detailed information. The UK has been one of the fastest countries to adopt the Taskforce on Climate-related Financial Disclosure (TCFD) reporting requirements into law. This covers corporates, regulated financial institutions, and pension schemes. Large pension schemes in the country have to report climate risks in line with TCFD guidance since last October. This is also part of the Occupational Pension Schemes...

September 22, 2022
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