UK Roundup: The Pensions Regulator, ITN, Shropshire
UK - The Pensions Regulator has published new guidance on index-linking to the consumer price index (CPI) that could see pension schemes forced to pay their deficit sooner than previously agreed.
Additionally, ITN, the news provider partially owned by UK television channel ITV, is facing a legal challenge over changes to its pension fund, while Shropshire County Pension Fund has put out a tender for consultancy services.
The Pension Regulator (TPR) today issued guidance for trustees on switching pension indexation from the retail price index (RPI) to CPI.
In the guidance, TPR said that if the change to CPI resulted in lower liabilities for certain schemes, this should shorten the periods for recovery plans.
Mercer’s Deborah Cooper was critical of the move: “It is not appropriate for TPR to attempt to impose additional security on schemes over and above what trustees consider is reasonable when carrying out their statutory duties, in agreement with sponsoring employers.”
Andrew Bradshaw, a partner at law firm Sacker & Partners, said the regulator was essentially taking a “dim view” of employers looking to make immediate savings.
“Essentially, the regulator is saying any savings made should be used toward funding pension scheme deficits rather than giving employers a windfall,” he said.
News provider ITN is facing a High Court challenge against proposals aimed at solving a predicted £56m pension deficit.
Trustees of the ITN pension fund are questioning the legality of current proposals, which would see changes made to the way pensions are paid to the families of deceased scheme members.
It is believed the changes could save the company £11m in payments and allow the pension fund to solve its deficit problem over 15 years.
The trustees are expected to apply for a hearing later this year, with a result not expected for a further 12 months.
The £716m Shropshire County Pension Fund is seeking a consultant for a five-year contract.
Shropshire Council would like the consultant to provide strategic advice on fund investment, as well as help with overseeing and appointing fund managers.
The consultant would be required to work in Shropshire, and the council is looking to award the contract by the beginning of October.
Interested parties should contact the authority by next Thursday. The submission deadline is 2 August.