Press Releases

We believe: The large majority of schemes are well managed and should be able to pay benefits in full; The regulatory regime should not be changed, with the potential to undermine the majority of well-run schemes, to deal with challenges of a few at the edges; A low interest rate environment does not warrant an exceptional approach; 

Key findings of our second annual Independent Trustee Survey:A quarter of independent trustees believe sponsor failure – also known as ‘covenant risk’, is one of the biggest risks to DB schemes; Yet 43% of independent trustees say long-term covenant risk isn’t integrated into schemes’ strategic investment and funding decisions. Almost a quarter say the biggest challenge facing trustee boards is incorporating covenant alongside contribution and investment strategy.

The UK’s combined DB deficit could be reduced by £175bn if all schemes could switch from RPI to CPI for pension increases and revaluation – but this would reduce the benefits of an average DB scheme member by £20,000. If schemes could reduce pension revaluation and increases further to the statutory minimum requirement, this could take a third off the £1 trillion UK DB deficit but cut the average scheme member’s benefits by £32,500. When schemes enter the PPF, members benefits are reduced by £45,000 on average.

Delivering on the ambition of bringing everyone’s DC and state pension data into a consolidated is no small undertaking. But it’s a hugely important step in helping to solve the crippling savings crisis we face as a nation. Post the referendum on Brexit, three quarters of those with DC pensions are unlikely to secure an adequate income in retirement

Welcome to our summer edition edition of Administration Matters, our quarterly newsletter on current issues affecting pension administration. 

An update on how Brexit has impacted the markets, policy, DB funding and broader long term savings.

The reverberations of the UK's vote to leave the EU may be felt for many years, but even a few weeks have allowed financial markets to take stock.

Encouraging a mass of transfers would be wrong for the majority of DB scheme members and worsen the funding position further for many schemes.

The impact of low yields won’t be felt equally by all schemes – it depends on the interest rate hedges they had in place.

More schemes closing to new entrants is inevitable, as the cost of providing a DB pension has now risen to 50% of pay.

Hymans Robertson, the independent pensions, benefits and risk consultancy, has appointed Sarah Steel as a Senior New Business Consultant. Sarah joins the firm from Aon Hewitt where she was Sales Director for their Employee Benefits Business.

The combined deficit of UK defined benefit (DB) pension schemes has hit £950bn for the first time ever. This is off the back of further drops in yields as the Bank of England attempts to roll out its package of Quantitative Easing. The BoE failed to buy the gilts it hoped to yesterday as investors seem to be unwilling to part with their longer-dated bonds. In light of that we could see the situation deteriorate further over the coming days. 

The combined liabilities of UK Defined Benefit (DB) pension schemes have risen by £70bn as a direct consequence of the Bank of England’s decision to cut interest rates to 0.25% and introduce a new £60bn programme of QE.