01 May 2024
6 min
See excerpts from this month's articles below (to read more, please download our latest Current Issues).
The Pensions Regulator has issued the 2024 edition of its Annual Funding Statement for private-sector defined benefit (DB) schemes. In recognition of other developments that are afoot - funding reforms and the Mansion House initiative - this year’s Statement has been kept short, at around seven printed pages, and largely reiterates the points made in 2023. Where funding levels have improved trustees are urged to reconsider the strategies that they established in a period of low interest rates to ensure they remain in the best interests of members. Options include running-on to generate surplus, buy-out with an insurer or entering a consolidator. Meanwhile, the ‘sizable minority’ that are still in deficit on their scheme-specific funding basis are advised to plan to make up the shortfall as quickly as their sponsors can reasonably afford, with careful attention to covenant strength.
Two sets of Regulations, made on 2 April 2024, have brought the Pensions Act 2021’s defined benefit (DB) funding reforms into force, with effect from 6 April 2024. The changes will manifest themselves in actuarial valuations with effective dates on or after 22 September 2024.
The Pensions Regulator has published a Regulatory Intervention Report setting out how it reached a settlement after restructuring activity and debt write-offs put assets outside the reach of a small defined benefit (DB) pension scheme when its sponsoring employer went into administration.
The Pensions Ombudsman recently published a mammoth (72-page) determination, exploring defences to 'equitable recoupment', in which trustees offset overpayments against pension instalments, rather than asking the member to pay the money back. He whittled down more than £90,000 of claimed overpayments, made over the course of 24 years to one, now-elderly gentleman, to about £6,500.
Updates on PSN 158 and PSN 159.
This communication has been compiled by Hymans Robertson LLP, and is based upon their understanding of legislation and events as at the date of publication. It is designed to be a general information summary and may be subject to change. It is not a definitive analysis of the subject covered or specific to the circumstances of any particular employer, pension scheme or individual. The information contained is not intended to constitute advice, and should not be considered a substitute for specific advice in relation to individual circumstances. Where the subject of this document involves legal issues you may wish to take legal advice. Hymans Robertson LLP accepts no liability for errors or omissions or reliance on any statement or opinion.
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