Archive for February 2015

Neil Copeland

Following the horrendous suffering of WWI the French were determined never again to be invaded by Germany. There was a tremendous focus on fortifying the Franco-German border. A tremendous focus on building a line of concrete fortifications, obstacles, and weapons installations between themselves and the Germans. A tremendous focus on building the impregnable Maginot Line. In 1940 the German Army simply drove around it in their tanks and conquered France in about 6 weeks. Via Belgium.

Such is the folly of focusing on the wrong thing.

There has been a lot of worthy stuff going on around DC pensions of late. Regulatory guidance, upping governance, capping charges, auto-enrolment and, especially,  pension freedom. Master trusts have a lovely new, shiny, impregnable assurance framework. You don’t have to hand your money to an insurance company any more. Read more »

Richard Smith

(Spence & Partners latest blog for Pension Funds Online )

Last week I had the pleasure of chairing a session at the annual conference of the Association of Consulting Actuaries. I had high hopes for an interesting and interactive session, and was not disappointed. The slot was entitled “Current issues in corporate pensions” and you don’t need to work in the industry to know that we are currently experiencing some pretty momentous issues in the corporate pensions space.

The speakers had rather optimistically chosen six topics to cover in their hour-long slot. I say rather optimistically, as we only had time to cover about half of them. Listening to the presentation and the subsequent debate, I was struck by the sheer scale of the challenges that lie ahead for the unwary employer over the coming months. Read more »

Andrew Kitchen

Going from Bad to Worse

Having witnessed strong returns on assets over 2014, many scheme sponsors could be looking forward, optimistically, to reporting improved balance sheet funding positions in 2015.

However, assets are only one part of the picture.

Read more »

Chris Roberts

2015 is a landmark year for the auto enrolment process.  The 3rd anniversary for early adopters means the first tranche of re-enrolment processes will begin.  With this in mind I have been considering how the process has developed for larger companies and the issues facing the smaller companies reaching their statutory deadlines.

The Regulator has published statistics surrounding key auto enrolment goals.  The opt out ratio expectation has been reduced from 30% to 15% based on the experience to date.  We are also advised that 99% of Employers have managed the process without the need for intervention.  The initial Regulator study suggested it had only exercised its enforcement powers in 14 instances.  However, a subsequent report confirms that 160 employers have been issued with the fixed penalty notices.  It is clear that the larger employers have engaged in the process and using the path of least resistance approach, the membership has increased.  Without wanting to temper enthusiasm it was never likely that large organisations would pose significant auto enrolment issues.  These businesses will have specialists to guide them through the process.  In addition their workforce will in the majority already have had access to a suitable workplace pension vehicle. Read more »

Mike Spink

RIP Own Trust DC

On Wednesday evening I attended one of the NAPF’s PensionsConnection events focussing on the management of DC schemes. We were served up the usual treat of insightful speakers and good audience participation. And impeccable timing too – both the DWP Command Paper (government response to ‘Better Workplace Pensions: Putting Savers’ Interests First’) and the FCA’s final rules for Independent Governance Committees were issued earlier in the day.

The meeting focussed upon one particular aspect of the new Trust Based DC scheme Regulations which are due to come into force in two months time: the requirement that DC trustees consider the degree to which their scheme demonstrates and delivers ‘value for money’. We heard about the many difficulties involved in such an assessment – not least the fact that a large slice of the assessment will involve subjective analysis. It was noted that DWP and TPR have left the actual mechanics of this to the industry to solve. Trustees’ advisers should have a central role to play in providing relative scheme assessments to help provide various benchmarks. But in summary, all agreed that this one area alone was destined to involve significant time and expense. Read more »

Laura Cumming

The Spence team has sifted through all the industry changes and trends from the last quarter, picked out the highlights and condensed it into a snappy report for you to download. Each update briefly summarises what you need to know, and clearly sets out the actions you need to take, saving you hours scouring through multiple reports, press releases, blogs and articles.

Some key updates to keep an eye out for are:

  • HMRC’s vital VAT judgment; this could see schemes recover VAT on investment management costs
  • PPF levy costs; the PPF’s recent announcement on the 2015/16 levy is fundamental to your scheme’s PPF levy cost
  • Contracting Out; make sure you are keeping in line with the HMRC’s most recent update to ensure you are ready for the abolition of contracting out.

Download your copy of the Pensions Quarterly Update report here.

If you have any questions, please don’t hesitate to get in touch with your usual contact or the Spence team.


Alan Collins

Spence & Partners, the UK pensions actuaries and administration specialists, today announced their appointment by the Leighton Opticians Pension Scheme for their fully integrated DB scheme management service. The service includes actuarial, consultancy, administration, payroll, treasury and accounting functions.

Laura Cumming, Consultant at Spence, commented: “The Trustees of the scheme were very clear from the outset that developing an integrated approach to managing their scheme was crucial to handling both their ongoing commitments and planning for the future. As our technology platform provides immediate access to funding information, based upon live administration and investment data, the trustees will be able to become much more proactive with funding decisions and scheme management plans.

“Combining everyday functions with funding information allows all scheme activity to be run from the same base. This removes one of the unnecessary elements of modern advisory services – the transferring of data cuts for funding calculations. This is an outdated and lengthy process for a modern industry that no longer fits with the needs of schemes to act quickly and decisively.” Read more »

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