Atkin trustees, actuaries, consultants & administrators

Current issues - April 2018

TPR – Annual Funding Statement: Carrying on from last month’s DWP White Paper, Trustees and their sponsors are being pushed to improve funding and reduce risks more quickly than before. TPR accepts that different schemes are subject to different constraints but the message is clear that Schemes should, across the board, be looking to strengthen their funding position whilst they still have an Employer able to support them.

They are encouraging Trustees to look to increase contributions and put in place formal contingency plans to cover the remaining risks. Schemes with weak employers should prioritize the scheme over returns to shareholders, looking to ensure that the scheme is treated fairly when compared to dividend payments and being aware of covenant leakage such as intra-group loans, transfers of assets at less than full value and the level of senior management pay. It includes guidance as to what Trustees may want to consider before allowing for significant numbers of members to take transfer values in their valuation basis

Multi-Employer debt - A new option: Legislation has been introduced from 6 April 2018 establishing a new ‘deferred debt arrangement’ (DDA) option for managing employer debts in multi-employer DB schemes. This would allow a participating employer to continue to participate in the scheme even after it ceased to employ active members, which previously would have triggered a s75 debt.

 Recovery of overpayment – 6 years not always the limit?:  The High Court found that, where overpayments are recovered by adjusting future payments, the statutory six-year limit on recovering amounts does not apply. The Pensions Ombudsman has previously decided that time limits did apply to the recovery of overpayments.

 

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Thank you. Excellent communication, a rarity in this world of quick communication.

Member, MESL Pension Scheme