Hymans Robertson today publishes its new paper “A Closer Look at Capital Backed Journey Plans” which shows that Capital backed journey plans (CBJP) are becoming an increasingly key part of the growing alternative risk transfer market and could provide schemes with a lower risk means of meeting their long-term objectives.
The Government should introduce State auto-enrolment credits for career breaks and radically change the framework of occupational pensions to reduce the inequality of the widening Gender Pension Gap, Chris Noon, Partner at leading pensions consultancy Hymans Robertson, has stated in an open letter to the Work and Pensions Select Committee. He has outlined his thoughts in the letter following his appearance to give evidence at the Committee’s “saving for later life” discussion.
Current high levels of inflation are causing strain on LDI collateral pools as a result of rising gilt yields, and DB Schemes must take action, Hymans Robertson warns. The leading pensions and financial services consultancy says that DB Trustees must do much more to stress test their pool especially as further interest rate rises remain likely over the remainder of this year. Trustees must ensure there is an acceptable level of resilience in place.
Commenting on the impact on DB Schemes of the anticipated increase in Bank of England’s base rate this week, Elaine Torry, Co-Head of DB Investment says:
“For defined benefit pension schemes the impact of any short term interest rate is unlikely to move the funding dial. However, the rise in gilt yields which are happening concurrently cannot be ignored by these schemes."
Commenting on TPR’s Annual Funding Statement 2021/22, Laura McLaren, Partner, Hymans Robertson says:
“Today’s Annual Funding Statement is unlikely to cause a major stir, given that TPR’s been trailing many of the key points for some time. Nevertheless, there are some useful prompts on how defined benefit schemes should be approaching 2022 valuations in the current landscape. Recent market performance means funding remains on track for many – and an increasing number of schemes will be approaching fully funded on a technical provisions basis – but events of the last few years are a reminder that things can, and do, change quickly. We’re therefore supportive of the overarching message to trustees and sponsors to focus on developing robust long-term plans and managing risks."
With a significant downside risk in financial markets at present, DB Schemes should act quickly to lock in recent funding gains, according to the latest findings from Hymans Robertson, the leading pension and risk consultancy.
Hymans Robertson, the leading pensions and financial services consultancy, has appointed Shani McKenzie to Head of Sole Trustee Services. Recognising the increasing growth of sole trusteeship and the impact on service provision, Shani’s new role will see her lead the firm’s DB sole trustee services to its existing and future professional trustee clients.
Commenting on HMRC’s April 2022 GMP Equalisation Newsletter, Matt Davis, Head of GMP Equalisation at Hymans Robertson said:
“The industry will welcome the guidance from HMRC in today’s GMP equalisation newsletter for April 2022. This provides tax guidance for schemes looking at making transfer top-up payments and those investigating GMP conversion. The guidance gives more clarity to many pension schemes as they work through GMP equalisation projects."
More than £250bn of DC pension scheme assets could be potentially used for illiquid investment, with more than £100bn specifically for infrastructure investment, by 2030, according to analysis from Hymans Robertson. Its Illiquid Investment Embracing the Opportunities paper published today, finds that both the pandemic and the government’s levelling up agenda have reiterated the role of resilient supply chains and the need for material investment in infrastructure. Combined with the desire to support Net Zero goals, infrastructure investment presents an enormous opportunity for DC schemes.
Comments in response to the DWP consultation “Facilitating investment in illiquid assets by defined contribution pension schemes”
Comments in response to the DWP announcement regarding a consultation around new types of collective defined contribution (CDC) schemes