Press Releases

DC Master Trust default funds have retained the growth they experienced in early 2021 and have maintained that position since, according to analysis from Hymans Robertson in its latest Master Trust Default Fund Report. After the crashing lows funds experienced at the start of the pandemic this is encouraging for Master Trust members claims the leading pensions and financial services consultancy. While retirement outcomes for Master Trust remaining steady, however, they are subject to concerns around inflation, a continuing increasing cost of living, and the impact on salary growth warns the firm.

Commenting in response to the FCA and TPR’s ‘Driving Value for Money in Defined Contribution Pensions’ consultation closing this week, Claire Kapitan, DC Consultant, Hymans Robertson says:

“We agree with the ambition that this joint discussion paper from TPR and the FCA is trying to achieve. Value for money is a key consideration and pivotal in delivering good outcomes for members. Value, however is not simply about costs and charges. Costs and charges are, of course, important but not if the overall quality and suitability of service or performance is poor."

Up to 40% of default assets could be allocated to illiquid investments by DC schemes for younger members, improving their outcomes, according to analysis from Hymans Robertson in its Illiquid Investment for DC Schemes paper published today. Maximising the potential will require supportive legislation, regulation and guidance with the development of an investment strategy anchored to improving member outcomes, warns the leading pensions and financial services consultancy.

Commenting on today’s open DWP consultation ‘Enabling investment in productive finance’ Brenda Kite, DC Provider and Platform Solutions Lead, Hymans Robertson, says:

“Today’s announcement from the DWP to increase investing by DC schemes in illiquid assets, such as infrastructure and private equity, can improve retirement outcomes for DC members - both by diversifying the sources of investment growth and the ability to more directly influence the move to a low-carbon economy. However, we do not believe that allowing performance related fees for illiquid assets within the charge cap will be the “game-changer” the government hopes."

Commenting on TPR’s announcement that Clara-Pensions has been cleared to accept transfers, Iain Pearce, Senior Risk Transfer Consultant, Hymans Robertson, says:

“This is a landmark day in the history of defined benefit pensions as it opens up a new endgame for schemes that has not previously existed. This will provide more options to protect members’ benefits, especially for those schemes where there are significant doubts about their ability to be able to insure benefits in full at some point. Since The Pensions Regulator (“TPR”) released its guidance for superfunds over a year ago Clara-Pensions has been working hard to support the diligent assessment by TPR against this guidance and has now been added to the TPR website confirming that it has completed this assessment."

A lack of understanding about ‘company beliefs’ and how they impact decision making around pensions schemes could endanger the success of DB endgame strategies claims Hymans Robertson. The leading pensions and financial services consultancy warns that as these beliefs shape company decisions it’s imperative for them to align with strategic pensions choices. It’s worried that this is being neglected and can lead to unnecessary and damaging misunderstanding between sponsors and trustees.

Commenting on the concluded DWP Consultation ‘Permitted charges within Defined Contribution pensions schemes’ Michael Ambery, Partner says:

“We are pleased to see that today’s Consultation, Permitted charges within DC pensions schemes, has protected small pension pots from erosion and becoming worthless. This commitment will protect those with relatively small pots having these diminished by investment charges. However, we question whether this goes far enough, and believe £100 remains a very small protection value and relatively insignificant in respect of the de minimis level. This level could have been much larger and should be reviewed for relevance to afford pension savers much greater protection. We remain concerned that the operational impact of changes to protect members leaves the administration and provider teams little time to ensure protections are in place.

Commenting on the Government’s announcement that the UK will be the world’s first net-zero financial centre, Simon Jones, Head of Responsible Investment, Hymans Robertson, says:

“In the proposals announced today, the UK Government is seeking to make planning for the transition to net zero and the disclosure of those plans a condition of business. Although not initially set to be a mandatory requirement, better and more comprehensive disclosure will allow investors to effectively scrutinise and challenge the plans that organisations have in place. But we need to remember that the challenge is not just one for investors, but for all parts of the economy. Having transition plans will only be effective if there are also clear and strong policy pathways, backed by regulation where necessary that require companies to change. This is what will ultimately drive a reduction in emissions across the real economy."

Hymans Robertson, the leading pensions and financial services consultancy, has appointed Claire O’Neill to further expand its Risk Transfer team.

Claire joins from Mercer’s Risk Transfer team where she focused on helping clients reduce the risk in their defined benefit pension schemes through a range of de-risking strategies, including both risk transfer transactions and member options exercises. Claire has worked and advised on a variety of bulk annuity transactions, ranging from £13m to £1bn in size.

Industry experts from Hymans Robertson give their comments and feedback on the key annoucements from this year’s Budget speech.

Almost two thirds (63%) of DB Scheme Trustees believe there is a heightened need for schemes to increase their reliance on technology, and the efficiencies they can bring, according to research from Hymans Robertson. The fallout from Covid-19 has created a move to embrace technology with the findings almost double what they were in the same period last year, as Trustees embraced new working styles and patterns, according to the leading pensions and financial services consultancy, as it warns that all schemes must take advantage of all the digital tools available.

"We are supportive of the FCA’s proposals to extend the range of vehicles for pension schemes to access long-term investments such as illiquids. In particular, we agree with the proposal to remove the upper limit on exposure to illiquid investments for LTAFs, which addresses one of the current constraints with existing fund types that has limited innovation. Although not required, we also share the FCA’s positive view on work carried out by the Cost Transparency Initiative and that this should be used in the context of LTAFs where at all possible."