UK roundup: TPR, Pensions Act, RetailLink Pensions Plan, L&G
Research conducted by The Pensions Regulator has revealed a growing trend in defined benefit (DB) and hybrid schemes fully integrating risk management and the employer covenant.
In the regulator’s annual governance survey, data showed the proportion of schemes fully integrating this rose to 60% from 47%.
It also found the proportion of defined contribution (DC) schemes not adhering to the legal requirement to maintain a statement of investment principle as high.
A fifth of schemes have gone over the maximum three-year period, while 14% have never reviewed their SIP.
The proportion of schemes operating without a SIP fell from 14% to 3% from 2013.
In other news, the Pensions Bill, the national Bill that will see the implementation of the single-tier state pension, has been finalised and become law.
Receiving Royal Ascent, the Pensions Act 2014, as it will now be called, creates a flat-rate first-pillar pension for those who have contributed to the state for 10 years, although, to receive the full payment, contributions must be for 35 years.
It also legislates for the end of contracting out, a system whereby DB schemes could contract out members from the second state pension (S2P) and provide it from within the scheme.
The previous tiered system was criticised for disadvantaging self-employed citizens and women who take career breaks.
The law also includes legislation to allow government to implement a charge cap on DC schemes, and create a pot-follows-member system from stranded DC pots.
Steve Webb, minister for pensions, said the new state pension would provide clarity and confidence to people about retirement income they receive.
And finally, the RetailLink Management Limited Pension Plan has begun its winding up process by agreeing a £35m insurance contract with Legal & General (L&G), covering liabilities for nearly 100 deferred and current pensioners.
The agreement with L&G incorporated a deferred premium option, which allows the trustees to fully insure the remaining members, staggering a £9m premium payment over the next four years.
The sponsor, Enterprise Inns, said after the four years, L&G will issue insurance policies to the members, and the scheme will be wound up.