Atkin trustees, actuaries, consultants & administrators

Current issues - May 2017

Pensions and Politics: With the general election now less than a month away, we have a look at what impact it might have on final salary pension schemes.

TPR – Annual Funding Statement: The Pensions Regulator has issued its yearly statement aimed at those undertaking valuations in the period September 2016 to September 2017 which takes a less conciliatory tone than previous years. It has recommend that Schemes should seek higher contributions or other non-cash forms of support, that Schemes should review whether the level of shareholder distributions have been appropriate given any funding deficit and that they intend to be more pro-active in those cases which are deemed to be at the greatest risk. TPR have also indicated that it is likely to take enforcement action where delays could have been predicted or where they were not notified which, given previous comments about taking a stronger line on imposing fines, trustees should be mindful of potential breaches and notifying TPR early. Trustees should also ensure that they have sufficient information to assess the scheme risks (which might involve asset liability modelling) and that all their decisions are properly documented and explained.

Multi-Employer debt - A new option: The DWP is consulting on draft Amendment Regulations to allow employers to continue to participate in a multi-employer DB scheme even after they have ceased to have active members in the scheme thereby avoiding the need for an immediate s75 buy-out debt falling due. Whilst this is welcome, in its current guise, the Trustees will need to be satisfied that the member’s security has not been weakened and will retain the power to cancel the arrangement (meaning that the s75 debt would then fall due) if they feel that the covenant is weakening. It will therefore be important that there is a sensible balance of powers so that these arrangements are workable.

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One of the key issues in the relationship is that you have kept a close and personal contact with the company and trustees. This has been very helpful in order to solve situations we have faced in the past and it gives us comfort for the future.

Martin, Administration and Actuarial client