Written report, prepared and signed by the scheme actuary, on developments affecting the scheme's technical provisions since the last actuarial valuation.
CORONAVIRUS (COVID-19) UPDATE: The coronavirus pandemic has had a detrimental impact on the funding levels and employer covenant of a lot of DB schemes. The Pensions Regulator (TPR) has issued various guidance documents to help DB trustees deal with funding issues, including employer covenant changes, employer requests for funding easements (eg to reduce or suspend deficit repair contributions), completing ongoing valuations and changes to recovery plans. Until 30 June 2020, DB trustees could delay their recovery plan submission/valuations if they needed more time to consider the scheme’s and employer’s situation. In updated guidance ‘COVID-19: an update on reporting duties and enforcement activity’, ‘DB scheme funding: COVID-19 guidance for employers’, and ‘DB scheme funding and investment: COVID-19 guidance for trustees’ published on 16 June 2020, TPR noted that trustees would be required to resume reporting information with effect from 1 July 2020 including for late valuations and recovery plans not agreed. Otherwise, TPR reiterated that it would continue to take a reasonable approach to late submission caused by COVID-19 issues provided valid reasons can be shown. TPR will support trustees if they cannot agree a valuation for valid reasons. For further information, see Practice Note: Coronavirus (COVID-19)—the pensions implications for trustees—Funding impact for DB schemes.FORTHCOMING DEVELOPMENT 1: The Pensions Regulator
The role of the Pensions Regulator in respect of public sector schemes The Pensions Regulator is the statutory body that regulates occupational pension schemes with a view to (among other things) protecting members' benefits, minimising claims on the Pension Protection Fund, and promoting and improving the understanding of the good administration of work-based pension schemes. This Practice Note looks at the requirements and recommendations of the Pensions Regulator in relation to public sector pension schemes, which until 2014 had largely been outside the Regulator's scope. In particular, it considers the public sector schemes under the Regulator’s remit and the Regulator’s requirements in relation to: • management structure • knowledge and understanding • conflicts of interest • risk management structure • records and administration • dispute resolution, and • reporting requirements What are public sector pension schemes? There is no single definition of what constitutes a public sector pension scheme, but since the Public Service Pensions Act 2013 (PSPA 2013), it is becoming common practice to consider schemes under that Act as public sector schemes and those not under that Act as not public sector schemes. Some schemes operating in the public sector may benefit from other exemptions which take them outside the control of the Pensions Regulator, for example, schemes that are for only one member or that are unfunded. Such schemes are sometimes found in respect of senior officials, such as the chair of a non-departmental
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A pension scheme has a buy-in policy for the pensioners in the scheme. The scheme actuaries value the policy annually. Is this a necessary requirement of the actuaries? Can the insurer who the policy is with value the policy instead? We have assumed that the scheme to which the buy-in policy relates is a defined benefit (DB) scheme to which the funding requirements of Part 3 of the Pensions Act 2004 apply. As explained in Practice Note: Actuarial funding valuations, a full actuarial valuation of a DB scheme is required at least triennially (ie every three years). However, in the years, where no full actuarial valuation is required, scheme actuaries must prepare an actuarial report. The purpose of the annual actuarial report is to give an
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Corporate analysis: In this case the Court of Appeal considered the legality of the pensions arrangement for former directors of a company, in particular, whether the directors’ membership of a secured unfunded unapproved retirement benefit scheme amounted to the acquisition of a non-cash asset for the purposes of section 320 Companies Act 1985 (CA 1985) (whose successor is now to be found in section 190 of the Companies Act 2006 (CA 2006)). The case raises some interesting issues regarding how definitions of 'non-cash asset', 'interest' and 'connected person' can be construed for the purposes of CA 1985, s 320.
Pensions analysis: The Department for Work and Pensions (DWP) has published its proposed changes to the automatic enrolment (AE) process. The changes are intended to simplify the process and to reduce the burdens on businesses. Maralyn Thomas, director at Castle Pension Trustees, looks at the proposals.
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