Posts by Brian

Brian Spence

Brian Spence

Fellow of the Institute and Faculty of Actuaries and Society of Actuaries in Ireland, scheme actuary, professional pension trustee
Brian Spence

As a firm including Northern Ireland actuaries we surely be justified for feeling left out in the cold again by the new Joint Proposal to merge the Faculty of Actuaries in Scotland and the Institute of Actuaries.

If the proposals are accepted a Scottish constituency will be created primarily for actuaries in Scotland (which we have a very defintite interest in too!), as will a Scottish Board to promote the Actuarial Profession in Scotland.  The Scottish Board will be able to draw on a £500,000 endowment.

Despite Northern Ireland having a government to which power is devolved to a much greater extent than in Scotland it receives relatively little attention from the Actuarial Profession.  I am not aware that there is any contact to speak of between the Actuarial Profession and the main political parties and there have been instances of problems with Northern Ireland legislation not being subject to some of the scrutiny that it might have been.

It is disappointing but not altogether surprising to see nothing in the revised merger proposals to address this.

Brian Spence is a founder of actuaries Spence & Partners Limited and a director of independent trustee Dalriada Trustees Limited.  You can follow him at @briandspence or @PensionsEndgame on Twitter or link to him on LinkedIn.

Follow @SpencePartners and @DalriadaTrustee on Twitter.

Brian Spence

Actuaries and pensions lawyers up and down the UK are earning good fees providing opinions on the vexed subject of equalisation after Angela Eagle’s welcome announcement.  GMP Equalisation continues to be consigned to the “too difficult” tray with prevarication along the lines

…this is an impossible task

…the government’s view is not binding

…trustees should wait for government guidance on how to equalise

For example, and not wishing to single them out, the otherwise esteemed actuaries Lane Clark & Peacock say “The industry has been asking for this for 20 years and not yet received a response.” Well actually no that is not true – we have not been asking, we know what equal means and have done since primary school.

On the other hand as Richard Bryant points out in his excellent Blog Prudential are not completing documentation for annuities on wind-up where there are post 1990 GMPs.  Prudential seem to get it – gender equality has been a requirement since 1990 and however much the industry may complain it will have to be addressed.

As my colleague David Davison has written recently on GMP Equalisation – this is not a complicated issue and in my earlier article I set out the practical steps for trustees needed to bring about the equalisation of GMPs.

Equal means equal and any modern pensions payroll system should be able to accommodate this.  If trustees have accurate historic data and good administration software it is a relatively simple spreadsheet calculation.  If not then there may be approximations required to ensure inequalities are eliminated and these approximations may add to the liabilities which is part of the price to be paid for poor data.

Brian Spence is a founder of actuaries Spence & Partners Limited and a director of independent trustee Dalriada Trustees Limited.  You can follow him at @briandspence or @PensionsEndgame on Twitter or link to him on LinkedIn.

Follow @SpencePartners and @DalriadaTrustee on Twitter.

Brian Spence

It has seemed obvious to us for many years that trustees and actuaries would eventually be required to end inequality within occupational pension schemes resulting from guaranteed minimum pensions (GMPs) accrued since 17 May 1990.

The Government’s statement by Angela Eagle on Thursday 28th January is an extremely welcome and sensible step. There is undoubtedly some detail to work through for individual schemes but at least now hopefully the industry can get on with it.

Spence & Partners have extensive experience as actuaries and as independent trustees of implementing practical methods of equalising GMPs.

Stand back though for the roars of anguish from the industry!

Brian Spence is a founder of actuaries Spence & Partners Limited and a director of independent trustee Dalriada Trustees Limited.  You can follow him at @briandspence or @PensionsEndgame on Twitter or link to him on LinkedIn.  Dalriada provides professional trustee services and Spence & Partners can provide support to employers in appointing an independent trustee.  Brian has written a series of articles on appointing an independent trustee.

Follow @SpencePartners and @DalriadaTrustee on Twitter.

Brian Spence

The former Chairman of The Pensions Advisory Service (TPAS) is quoted as saying that TPAS is in danger of being “dumped or carved up” whereas Government Minister Angela Eagle states that TPAS has embarked on a “modernisation and efficiency programme.”

Members of trust based pension schemes have trustees to protect their interests (increasingly schemes have professional trustees)  backed by legions of advisers and with the might of the Pensions Regulator behind them if necessary.   Trust based schemes are also required to have their own Internal Disputes Resolution Procedure. Usually complaints are resolved either informally or through the Scheme’s disputes procedure. If a member is unhappy with the final decision of the trustees, which is often subject to an internal appeals process as well, their complaint can go to the Pensions Ombudsman.

In contract based schemes there is the provider’s complaints procedure, the Financial Services Authority and the Financial Services Ombudsman.

In the last resort pension scheme members also have recourse to the Courts.

The question is does the taxpayer really need TPAS at all?

Pensions issues are complex detailed and the more difficult issues can often only be resolved with the assistance of highly skilled pensions lawyers and actuaries. Many TPAS advisors are well intentioned but are often volunteers with a busy day job.

Can TPAS really actually add much value to the work of all the professionals involved?

TPAS advisers are meant to be neutral arbiters and not in any sense a member’s “champion” and the majority appear to understand this. However, on occasion, particularly where the issues involved are complex and outside the particular area of expertise of the adviser, they can be more of a hindrance than a help (and arguably add significantly to the professional fees involved in resolving an issue).

If there is a problem with the quality of governance then the root cause should be dealt with and the Pensions Regulator has made great strides in this area.

Is TPAS a sensible use of public money at all in these straitened times? We think not.

Brian Spence is a founder of actuaries Spence & Partners Limited and a director of independent trustee Dalriada Trustees Limited.  You can follow him at @briandspence or @PensionsEndgame on Twitter or link to him on LinkedIn.  Dalriada provides professional trustee services and Spence & Partners can provide support to employers in appointing an independent trustee.  Brian has written a series of articles on appointing an independent trustee.

Follow @SpencePartners and @DalriadaTrustee on Twitter.

Brian Spence

Q.   Every time I open the paper I see another company pension scheme is closing. I am worried that our may be next. How easy is it for my employer to close the scheme to new or existing members, and what as a members should we be monitoring?

Firms cannot any longer have an open-ended commitment to final salary pensions, especially in the environment where deficits narrow or widen almost on a daily basis.

But closing a final-salary pension scheme is not an easy or uncomplicated option. Read more »

Brian Spence

Even with the best advice decisions by pension trustees do not always work out as well as hoped for.

Employers can fail, transactions that promised to improve the employer’s position can look less attractive with hindsight.

The time horizon for pension schemes is such that it can be many years before issues are raised.

Sometimes trustees and advisers can be required to explain and justify themselves. Almost all of today’s written communication is electronic and while document management systems (whether these are electronic or paper based) are essential these should always be supported by secure email archiving – i.e. a searchable record of every single email into or out of the enterprise (obviously these days spam must be filtered out first).

One of the best investments we ever made was in our email archiving solution Mimosa Nearpoint (obviously operated in a virtualised environment as all servers should these days – see earlier article).

Lay pension scheme trustees should ensure that secure searchable archiving of all their personal email is in place. They should also ensure that they understand the email archiving and retention policies of their key service providers.

Brian Spence is a founder of actuaries Spence & Partners Limited and a director of independent trustee Dalriada Trustees Limited.  You can follow him at @briandspence or @PensionsEndgame on Twitter or link to him on LinkedIn.  Dalriada provides professional trustee services and Spence & Partners can provide support to employers in appointing an independent trustee.  Brian has written a series of articles on appointing an independent trustee.

Follow @SpencePartners and @DalriadaTrustee on Twitter.

Brian Spence

EMERGENCY COVER

Spence & Partners’ offices will be closed from 1500 on Thursday 24 December until 0830 on Monday 4 January (Belfast and London) or 5 January (Glasgow).

If you have an urgent enquiry over this period please use the Contact Form on this website and your enquiry will be acknowledged and if possible dealt with.

In the event that you need urgent assistance you can speak to one of our directors Brian Spence on 07802 403013 or Neil Copeland on 07803 937138.

Brian Spence

Many employers have been facing a very tough time recently. Spence & Partners normally reviews its hourly charging rates from 1 January each year. In recognition of the tough trading conditions many of our clients are experiencing we have decided to hold our 2009 rates for 2010.

We understand that some of the larger actuarial consultancies and pensions administrators are attempting to implement fee increases in 2010.

There has probably never been a better time for pension scheme trustees and employers to review actuarial advisers and when appointing new advisers they should consider smaller independent consulting firms such as Spence & Partners which offer just as good a service as the large consultancy firms, in fact a much more engaged service, but at a significantly more competitive price.

Brian Spence

Jagger & Associates excellent Investment Bulletin on longevity swaps continues with part 2.

Previously posted part 1 can be found here.

If you would like to consider this option or review any of your investment options contact Jagger & Associates, Actuaries & Investment Consultants on 0161 873 9350 or email enquiries@jaggerandassociates.co.uk.

Brian Spence is a founder of actuaries Spence & Partners Limited and a director of independent trustee Dalriada Trustees Limited.  You can follow him at @briandspence or @PensionsEndgame on Twitter or link to him on LinkedIn.  Dalriada provides professional trustee services and Spence & Partners can provide support to employers in appointing an independent trustee.  Brian has written a series of articles on appointing an independent trustee.

Follow @SpencePartners and @DalriadaTrustee on Twitter.

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