Making Sense of Pensions

Brian Spence

On Monday 18th February 2008 The Pension Regulator published a draft statement modifying its approach to looking at mortality assumptions within defined benefit pension schemes.  The approach has been developed in light of emerging evidence coming primarily over the last year from recovery plans submitted to the Regulator. Read more »

Brian Spence

There has undoubtedly been increased acceptance of the audit standard FRS17 over recent years although there is still a significant divergence in opinion about it ranging from it’s acceptance as being a necessary evil, it being viewed as a pain in the proverbials, or providing a useful measure of a potential liability.  If nothing else at least it has given us a starting point when looking to measure pension liabilities between companies on a consistent basis – or has it!!! Read more »

Brian Spence

Smoke and mirrors is a metaphor for, amongst other things, an insubstantial explanation or description. The source of the saying is based on magicians’ illusions, where magicians make objects appear or disappear by extending or retracting mirrors amid a confusing burst of smoke. The expression may have a connotation of virtuosity or cleverness in carrying out such a trick. Read more »

Brian Spence

Lay Trustees – The Future

The obvious question regarding acting as a pension scheme trustee in the current environment is: who in their right mind would want to take on a role for which they have had no relevant training or experience, which carries unlimited personal liability, up to and including the value of your house, in an increasingly litigious world, and provides little tangible reward?

Company directors are finding it increasingly difficult to perform both the role of company director and pension scheme trustee given the potential conflicts of interest that exist around setting scheme contributions, agreeing future investment strategy or dealing with a corporate restructure. Read more »

Brian Spence

Back in the old days, by which I mean pre the 1995 Pension Act, pensions was a man’s world. That’s possibly a bit sexist but bear with me. Consulting colossi bestrode the trustee meetings of the day dispensing advice with a devil may care attitude and an unfeasible moustache.

”Your pension scheme needs amending?” they would roar, unsure whether it was a question or a statement, but undeterred all the same. “I’ll sort that out for you myself, no need for those awfully expensive lawyer chaps.” Read more »

Brian Spence

Ah, the fickle nature of the British press. In November 2003, Gordon Brown (along with Jude Law, Johnny Depp, George Clooney, Jarvis Cocker, Jeremy Paxman, Jonny Wilkinson, Russell Crowe, and the Dalai Lama!) was voted one of Britain’s top “sex gods” in a magazine survey. David Beckham did not poll a single vote. Read more »

Brian Spence

“Pulp Pensions”

The recent popularity of time travelling dramas like Life on Mars, Doctor Who, Torchwood and Primeval have been bringing back nostalgic memories but for some of us we’ve recently had a more unwelcome time-travelling experience.

Pensions equalisation was something that most scheme administrators thought had been put to bed by the time of the Coloroll judgement in 1994. Most schemes felt comfortable about how they had addressed the issue and that the amount of benefits they were paying out for their members complied with the legal requirements. Read more »

David Davison

There has been much written recently about the potential pitfalls of so called ‘inducement exercises.’ Whilst some of the concerns are valid I believe that provided those participating take the time to understand the recent regulatory guidance and the roles of various parties in the process then the risks are lower and more manageable than they might appear at first glance.  Read more »

David Davison

There has been a huge amount of what I can only describe as ‘hype’ in the popular press and financial magazines over recent months, almost wholly negative, about the practice of employers topping up final salary scheme transfer values to allow members to exercise a real choice in relation to their pension benefits.   I wouldn’t wish to suggest that reporting on this matter approaches the worst excesses of the fourth estate (“Freddie Starr ate my Hamster” or “London bus found on Moon” for example) but headlines such as “Bribes offered to quit final salary schemes”1 and “Regulator launches probe into growing ‘cash for company pensions’ scandal”2 certainly leave scope for a more considered and balanced assessment of the issues. Read more »

Brian Spence

The role of Pensions Actuary is an interesting, varied and challenging career. The Pensions Actuary will be on hand to advise the sponsoring company, scheme trustees and members on important issues such as the design of their scheme, selecting the most suitable investment vehicles to be used, protecting members when schemes are changed or when companies are bought and sold, and enabling individuals to transfer benefits from one scheme to another.  The Actuary also has a pivotal role in ensuring schemes and their company sponsors meet what can often be the complex and onerous legislative and legal requirements associated with running a pension scheme. Read more »