Regular round-up of the latest pensions, investments, trusteeship and scheme management news
Current Issues - June 2021
02 Jun 2021
See excerpts from this month's articles below (to read more, please download our latest Current Issues):
DB annual funding statement 2021
The Pensions Regulator has published its Annual Funding Statement 2021, guidance for those currently or soon to be involved in actuarial valuations. As well as the expected recognition of COVID-19 issues, topics for discussion include the effects of Brexit, anticipated changes to the Retail Prices Index, climate change and liquidity risk. Its key theme is perhaps the importance of sustained focus on long-term planning and risk management.
Draft specs for simpler annual DC statements
The Department for Work and Pensions (DWP) has published draft rules for 'simpler annual benefit statements' from workplace defined contribution (DC) pension schemes. It is likely that some providers would have to revise their statements to comply with the new length and lay-out specifications.
Qualifying the right to transfer
The Department for Work and Pensions (DWP) has circulated draft legislation intended to block scam pension transfers. It would prevent trustees or managers from carrying out a member’s transfer instructions unless one (at least) of four conditions is met.
‘Pervasive failures’ in DB scheme audit
The Financial Reporting Council (FRC) publicized adverse findings made against an accountancy firm and one of its partners for 'pervasive failures' in several areas of their audit work for a client company. One of the problem areas was the company's liability towards its defined benefit (DB) pension scheme, the audit of which 'in several respects fell far short of what was required.' Most of the issues identified concerned lax scrutiny of the IAS 19 valuation produced by the company's actuarial adviser.
DC charges consultation
The Department for Work and Pensions (DWP) has published details of how it plans to introduce a minimum fund-size condition for charging structures involving flat fees in auto-enrolment default arrangements, with effect from 6 April 2022. However, it also indicates that it is inclined to abolish such combination-charge structures, from a date yet to be determined, so that the only permitted arrangement would be a single, fund- value- based charge based on a percentage of the member's rights.