Posts by Clare

Clare Caswell

An updated version of the Code of Good Practice for Incentive Exercises for Pensions was recently released following a review of the Code by the Incentive Exercises Monitoring Board.

Incentive Exercises (IE) are projects typically instigated by a pension scheme employer in which members are offered the opportunity to amend their benefits or to transfer their benefits out of the scheme. These exercises often include the provision of Independent Financial Advice for the members, paid for by the Employer, and can also include an enhancement to the members’ benefits.

Employers with the support of the Trustees will often run these exercises with the aim of reducing their scheme liabilities, and also to give members the opportunity to reshape their benefits to suit their lifestyle rather than being constrained by the structure of the scheme’s rules. Read more »

Clare Caswell

Whilst auto-enrolment (AE) has provided invigoration to the pension sector and many employees are engaging with pensions for the first time, there are still historic pension schemes hanging about creating headaches for employers that do not provide the best retirement options for members in today’s market.  Spence is actively involved in assisting employers by investigating the possible options available to them to manage both their existing pension scheme liabilities and their new responsibilities under auto-enrolment.

Although liability management exercises have previously been seen to be more advantageous for the employer rather than the member, the dawn of Pension Freedoms from April 2015 has proved that these exercises can now be more attractive to members as well as employers.  In addition to reducing an employer’s pension liability, these exercises also give members the opportunity to explore alternative and potentially more beneficial options, available to them in the pensions market.  So it’s a win-win for everyone!

Employers – what do we need to know? Read more »

Clare Caswell

On 11 November, Marian Elliott and I attended a meeting of the London School of Economics Actuarial Society to impart our wisdom on the topic every student wants to know about…pensions!  OK so maybe not every student but certainly those studying actuarial science with the potential of going into the world of pensions once they have graduated.

Rather than just presenting the topic of pensions Marian and I decided to get the students involved in discussing some of the real life implications of the world around us that affect pensions such as market movements, improvements in cancer survival rates and the difference that technology can make.  So we split into groups with a selection of newspaper headlines to decide whether or not the headlines would have a positive or negative effect on the funding level of a pension scheme.  Not an easy task for these very bright students who have an interest in maths and economics – I wonder how pension scheme members feel when they receive communications about their pension?! Read more »

Clare Caswell

Couples who are going through divorce proceedings, and their solicitors, will know that if there are pension assets to be considered then the Cash Equivalent Transfer Value (CETV) of these assets must be obtained from the relevant pension scheme. If you or your (ex) spouse is a member of a final salary pension scheme then beware the dangers of not knowing the definition of “Final Pensionable Salary” (FPS) within the scheme. This is of particular importance to those members who have been “acting up” to a position for a period of time where they receive a higher salary than usual for that period, but return to their normal salary after the period of “acting up”.

If the definition of FPS contains any reference to “the best” or “highest of”, for example, 5 years, and you are close to retirement and/or implementing a pension sharing order then pay close attention! Read more »

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