The Pensions and Lifetime Savings Association (PLSA) has commented on the Pensions Regulator’s (TPR) 2018 Annual funding statement for defined benefit pension schemes published today1.
Joe Dabrowski, Head of Governance and Investment, Pensions and Lifetime Savings Association, said:
“The improved funding level for defined benefit (DB) pension schemes is an encouraging sign. However, today’s statement and the DWP’s recent White Paper highlight the fact there remains much food for thought for the sponsors, trustees and advisers of DB pension schemes when setting their funding plans. This is particularly the case as sponsors continue to deal with a number of headwinds, including Brexit, which could impact the ability of the employer to support the scheme.
“The 90% increase in the Pension Regulator’s proactive casework over the past year is positive given its ambition to be clearer, quicker and tougher. This is especially relevant given that it will be 2019/20, at the earliest, before we see any of the legislative changes proposed in the Government’s recent White Paper. However, it is important that as the Regulator increases its activity it remains proportionate and practical in the use of its powers.
“Balancing risk is a key section of the statement for trustees and it is helpful to see the Regulator set out a more nuanced and focused range of employer characteristics and risks, better representing the range of different positions schemes find themselves in. This may be a useful starting point to build on ahead of TPR’s proposed new DB Funding Code of Practice, setting out its expectations of trustees and employers.
“Finally we are pleased to see TPR has placed particular emphasis on the possible risks associated with transfer activity. It is crucial for trustees to consider these risks, especially for schemes with a weaker funding position.”
NOTES TO EDITORS
1 The Pensions Regulator’s Annual Funding Statement is intended to help trustees and sponsoring employers of DB schemes, especially those currently reviewing whether their scheme is appropriately funded (their valuation), and any undergoing change that requires a review of funding and risk strategies.
ABOUT THE PENSIONS AND LIFETIME SAVINGS ASSOCIATION
We’re the Pensions and Lifetime Savings Association; the national association with a ninety year history of helping pension professionals run better pension schemes. Our members include over 1,300 pension schemes with 20 million members and £1 trillion in assets, and over 400 businesses. They make us the voice for pensions and lifetime savings in Westminster, Whitehall and Brussels.
Our purpose is simple: to help everyone to achieve a better income in retirement. We work to get more money into retirement savings, to get more value out of those savings and to build the confidence and understanding of savers.
Kathryn Mortimer, Press Officer, Pensions and Lifetime Savings Association
T: 020 7601 1748, M: 07901 007713, E: [email protected]
Eleanor Carric, PR Manager, Pensions and Lifetime Savings Association
T: 020 7601 1718, M: 07825 171 446, E: eleanor.c[email protected]