Barclays has announced a partnership with Smart Pension, a UK online pension provider, in which the bank’s SME customers and their employees will have access to a quick and easy online pensions platform.

The bank’s UK wide network of 1,100 business relationship managers will introduce their business banking clients to Smart Pension via the Barclays website. They will have access to Barclays’ proprietary Global Market Funds, which invest in a broad range of asset classes.

Smart Pension will offer an online portal for both the employer and employee so that individuals can easily manage their participation in the scheme. The portal can be integrated with other administrative programmes such as payroll, admin, reporting and compliance capabilities.

Last year, the bank took a minority stake in retirement technology provider, Smart, as part of its Series C fundraising round to support its global growth, which includes entry into the US market.

Jamie Fiveash, UK CEO at Smart, said: “This is an important milestone for us as a business. Not only do we get to offer Barclays customers a simple pension solution to ensure small businesses meet their auto enrolment obligations, but we also have the privilege of calling them our partner through the strategic investment made.”

Hannah Bernard, head of Barclays business banking, said: “For many busy small business owners, getting to grips with pensions can seem daunting, particularly when they’re juggling a long list of competing business priorities.”

PPF launches consultation on actuarial assumptions

The Pension Protection Fund (PPF) has today launched a consultation on its proposals to change the actuarial assumptions under section 143 valuations (PPF assessment valuations) and section 179 valuations (PPF levy valuations).

A recent review of the valuation assumptions showed they need updating to align with pricing in the bulk annuity market, the PPF said.

The fund is proposing several changes to bring these assumptions in line with the current market pricing:

  • to update the mortality assumptions by moving to the latest “S3” series mortality tables and to use the CMI 2019 mortality projections model;
  • to change the discount rates for pensioners and non-pensioners post retirement;
  • to amend the calculation for wind-up expenses and slightly reduce pensioner and non-pensioner benefit installation/payment expenses.

Lisa McCrory, PPF’s chief finance officer and chief actuary, said: “As part of a regular review, in December last year we held discussions with eight insurance companies about whether our current assumptions were dated and need reassessing.”

She said that based on these discussions, the PPF is now consulting on its proposals to find out whether its updated assumptions “strike the right balance with the bulk annuity market”.

“We want to invite stakeholders to share their views on our proposals which will help shape future actuarial assumptions,” she added.

The consultation ends at 5pm UK time on 18 March 2021 and a summary of responses will be published on the PPF website. The changes for valuations are set to be introduced on or after 1 May 2021.

To respond to the consultation, it can be done online or via email.

UK DB schemes’ health surpasses pre-COVID-19 levels

The health of the UK’s defined benefit (DB) pension schemes has surpassed that of their pre-COVID levels as they continued to recover through Q4 2020, according to data by Legal & General Investment Management (LGIM).

LGIM’s Health Tracker – which monitors the current health of UK DB pension schemes – found that the average DB scheme can expect to pay 97.1% of accrued pension benefits as of 31 December 2020, up 1.6% from 30 September 2020.

This, said LGIM, compares to the pre-COVID level of 96.5% from 31 December 2019 as well as the lows of 31 March 2020 (91.4%).

This latest improvement means LGIM’s measure was actually up on 2020 (from 96.5% to 97.1%) despite the 91.4% March numbers and marks a third successive quarter of growth across 2020.

Nominal rates were around 0.6% lower at the end of 2020 than at the start, but the impact from this was outweighed by the overall performance of growth assets over the year.

However, LGIM said it is important to note that these figures may yet still understate the negative impact of the pandemic, due to a weakening of covenants that many schemes will have endured.

John Southall, head of solutions research at LGIM, warned that “the extent of covenant deterioration remains unclear with a large variation in impact across sponsors”, adding that LGIM’s calculations are based on a typical BB sponsor rating.

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