Press Releases

Analysis from Hymans Robertson has shown an increase of 10% of Defined Contribution (DC) savers are now unlikely to meet their retirement income target as a result of Brexit. The latest figures from Hymans’ analysis of over 500,000 DC savers show that 75% of savers are now set to miss their target.

Key statistics: Cost of longevity risk increases by 50%, Low interest rates push liabilities up 50% over past 12 years, The risk of yields staying low or getting lower for longer has increased following Brexit and Total Defined Benefit pension liabilities now stand at £2.3 trillion

UK defined benefit (DB) pensions shortfall driven by record lows in gilt yields

Our response to British Steel Pension Scheme's public consultation.

Figures released from Hymans Robertson, the leading pensions and benefits consultancy, show that as at Thursday last week the collective UK DB pension deficit had reached £850bn, increasing by £120bn over a 6 week period. Since then it has bounced back by £30bn, thanks to yesterday’s rally in equities and an improvement in yields. This corresponds with shifting sentiments in the run up to Thursday’s Brexit referendum.

A third of CFOs** recognise their Defined Benefit (DB) schemes are now paying out more in pension payments than received in contributions. Research* shows 50% of FTSE350 DB schemes are now in this situation. 

The Government is expected to announce a change to the rules for the British Steel Pension in an effort to reduce its liabilities to help Tata Steel find a buyer. The change would allow it to base annual pension increases on the Consumer Prices Index (CPI) inflation measure, which is usually below the Retail Prices Index (RPI) measure currently used by the British Steel Pension.

Hymans Robertson has been appointed to provide actuarial, investment consultancy and administration services to the trustees of the DB scheme of Highlands and Islands Enterprise (HIE), the Scottish Government’s economic and community development agency for the Highlands & Islands of Scotland. With 300 staff located from Shetland to Argyll, HIE delivers projects and programmes which drive regional growth through developing businesses and sectors, investing in infrastructure, and strengthening communities. The DB scheme has assets of £80m and 875 members.

Greater regulation of Master Trusts is an absolute necessity. The Master Trust market has grown rapidly, driven by all workers being automatically enrolled into pension schemes. But to date consumers haven’t had the same safety nets as they would get if they were with an insurer.

The Pension Regulator’s (tPR’s) annual statement - which acts as a guide to the trustees and employers of Defined Benefit (DB) pension schemes, particularly those whose triennial valuations fall this year – has underlined the importance of DB schemes understanding and managing cashflow risk for the first time. 

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