The Pensions Administration Standards Association (PASA) has set up a benefit statements working group in connection with government plans for a “statement season”.

The Department for Work and Pensions (DWP) is working on regulations imposing mandatory standardised annual simple statements for workers in defined contribution auto-enrolment pension schemes.

It has also established a working group to investigate whether schemes sending out statements at a similar time for everyone – in a “statement season” – would improve people’s engagement with their pension savings.

PASA’s board director Girish Menezes is a member of the DWP-led working group, and PASA has now set up its own working group specifically to evaluate the impact on trust-based pension schemes.

Kim Gubler, PASA chair, said: “The pensions minister is keen to standardise and simplify what’s provided to members and PASA fully supports this move.

“The proposed changes, as outlined in the DWP’s recent consultation, have far reaching consequences for pension administrators, and the formation of our Benefit Statements Working Group is in direct response to this.”

Helen Ball, partner at law firm Sackers, is chairing PASA’s working group. She said the group would work through multiple issues raised by simplifying benefit statements, liaising with the DWP when required, and make recommendations to the PASA Board across three key areas:

  • The introduction of a ‘statement season’;
  • The legislative, regulatory or process changes required to support delivery of the statements; and
  • Guidance for trustees, administrators and sponsors.

The group has prepared an initial paper for discussion with DWP about administration issues associated with a statement season.

The other members of the PASA working group are Girish Menezes (Premier Pensions), Rosie Kwok (XPS Administration), Charlie Bramald (Aon) and Russell Whitmore (Evolve).

For now at least the UK government has abandoned the idea of pursuing a version of Sweden’s orange envelope to support a statement season.

Cobham to grant Ultra DB scheme £125m of pari passu security

The UK defined benefit (DB) pension scheme of Ultra Electronics is set to be granted £125m (€147m) of security as part of an agreement reached with Cobham in connection with the defence firm’s acquisition of Ultra.

The security is to rank pari passu with that granted to senior lenders to the Ultra Group.

The memorandum of understanding between the Ultra Electronics Pension Scheme and Cobham also covers cash contributions to the scheme.

Under an existing agreement with Ultra, Ultra had agreed to make payments of £11m per annum to eliminate a £56.6m deficit over the period ending March 2025.

Under the deal struck with Cobham, the pension scheme will be entitled to cash contributions of £100m in aggregate over five years.

By or before the first anniversary of the effective date of the memorandum, £53m is to be paid and the remaining £47m is to be paid in the subsequent four years.

The Ultra Electronics Pension Scheme was closed to new entrants in 2003 and to future accrual in 2016.

“Cobham recognises the importance of upholding Ultra’s pension obligations and ensuring that its pension schemes are appropriately funded in accordance with statutory and trust deed requirements,” it said in a regulatory announcement today.

The deal for Cobham to acquire Ultra was announced this morning, and will see shareholders in Ultra receive £35 per share. Cobham was taken private by US private equity firm Advent last year.

Phoenix completes second, £998m buy-in for own scheme

Phoenix completed a £998m buy-in with Pearl Pension Scheme, one of the group’s own defined benefit pension schemes, in July, according to the insurer’s half-year results.

It said it decided to accelerate the transaction after a slow start in the first half of the year for bulk annuities.

Pearl Scheme last year entered into an agreement with its principal employer, a Phoenix Group company, to complete a series of buy-ins, scheduled to be executed by the end of December 2023.

The first buy-in was completed with Phoenix Life Limited at the same time the agreement was struck, covering 25% of the Pearl scheme’s pensioner in-payment and deferred member liabilities.

With this July’s additional transaction, 60% of the scheme’s liabilities have been insured by Phoenix.

“Looking forward, we are committed to executing the buy-in of the remaining 40% of pension scheme liabilities no later than 2023, with the timing and size of future tranches subject to agreement with the pension trustee,” it said in its half-year results statement.

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