Press Releases

Widely held beliefs about the obstacles of moving a DC pension scheme to a new provider are ‘mythical’ barriers and can be simply debunked, claims Hymans Robertson in a new paper Debunking the myths of moving pension arrangements. The paper looks at three common misconceptions: that providers all offer the same thing, that once a scheme is in a master trust or contract-based arrangement it doesn’t need to change again, and finally, that it is really complex and time consuming to change providers, and challenges each of them. The leading pensions and financial services consultancy says that these should not be barriers. Instead, it’s good practice for employers to review their provider every three years and be open to change. This will make sure what the provider offers continues to align with their objectives and best meet the needs of their members. Changing provider, in some cases, may be the best option.

Well over a third (40%) of DB scheme sponsors don’t claim to be familiar with what the Pension Schemes Act 2021 requires regarding their company planning, financial activity, and compliance, according to research by Hymans Robertson.¹ Yet, nearly two thirds (61%) say that recent corporate activity has been impacted by the Act and 29% of respondents see complying with the 2021 Act as a key challenge for their DB schemes over the next three years. The leading pensions and financial services consultancy warns that more education is needed to raise awareness of how the requirements could or should affect their company, including on the implications to dividend policy and corporate strategy.

Commenting on the announcement today of Clara’s first transaction, Iain Pearce, Head of Alternative Risk Transfer, Hymans Robertson, says:

“We are really pleased to see Clara and the trustees successfully complete their first transaction. This is a positive day for members of the transferring scheme. They’ll benefit from the additional loss absorbing capital provided by Clara’s backers which will be locked away until Clara delivers on its “bridge to buy-out” promise to insure benefits in full in the future. In line with TPR’s guidance, the trustees of the transferring scheme will have carefully considered a range of strategies and concluded that the transfer improves the likelihood of members receiving full benefits...

Commenting on today’s Bank of England interest rates hold, Chris Arcari, Head of Capital Markets, Hymans Robertson, said:

• “There has been some nervousness about the fall in bond prices. For those heavily invested in long-term bonds, the value of their pots will have declined over the last two years. However, longer-term yields mean annuity rates have risen very rapidly. That is, it is cheaper to buy a retirement income so the amount of assets required is less.”

Nadeem Ladha has joined the Risk Transfer team at Hymans Robertson, the leading pensions and financial services consultancy, as a Senior Advisor on a short-term contract focusing on risk transfer projects involving special situations. Prior to joining the team, Nadeem was a senior Professional Independent Trustee at a professional trustee firm, where he specialised in leading pension schemes through risk transfer transactions. He had previously been at Hymans from 2005 to 2011.

Almost half (48%) of DB scheme sponsors intend to buy out, but 45% of those sponsors are worried about a lack of insurer capacity or interest, research by Hymans Robertson has found.¹ With nearly all (95%) of those scheme sponsors intending to buy-out projecting they’ll do so within 10 years, the leading pensions and financial services consultancy says that companies should keep their options open for new value creation opportunities. These may come from new market solutions or the recent Mansion House reforms. However, most companies are unclear about how those solutions or government policy may impact the detail of their pension strategy...

Low earning members of CDC (Collective Defined Contribution) pension schemes could subsidise the retirement incomes of wealthier members by as much as 30%, according to analysis by Hymans Robertson.

In a CDC scheme, members pool not only investment risk, but also longevity risk - the potential that a member will live longer than anticipated and need more money to fund their retirement. CDC schemes that pool large groups of members from different socio-economic backgrounds risk lower income members subsidising the incomes of better paid members, who typically live longer...

Commenting on today’s Consumer Price Inflation (CPI) announcement, Chris Arcari, Head of Capital Markets, Hymans Robertson, said:

“While today’s release shows year-on-year headline CPI inflation unchanged from August’s release, it has generally stayed on a downwards trend this year and core CPI edged down slightly. Prior to release, swap markets still implied a c.50% chance of a rate rise at the November meeting and a 100% chance that rates will have been raised at least once, to 5.5% p.a., by the end of the year. However, attention is increasingly shifting from how far rates will be raised, to how long they will remain at current levels...

Hymans Robertson, the leading pensions and risk consultancy, has promoted Alison Leslie to Head of DC Investment.

With over 25 years’ experience in the pensions industry, Alison joined Hymans in 2021 having worked with Aon for over 12 years in both DB and DC consulting. She brings a wealth of experience from in-house providers to third party consulting across a broad spectrum of disciplines.

Hymans Robertson LLP is launching a new financial wellbeing service for employers - Hymans Robertson Personal Wealth (HRPW). HRPW has been working successfully with over 20 large corporates over the past year and is now fully launching for business. It offers employers the ability to give their people a tailored programme of financial wellbeing services including wellbeing workshops, one-to-one guidance consultations, financial coaching and financial planning.

Commenting on reports that DB pension funds are selling off illiquid assets, Elaine Torry, Partner & Co-Head of Trustee DB Investment, Hymans Robertson, said:

“In light of the improvement in funding positions over the last 12-18 months, trustees and sponsors of UK DB pension funds are unsurprisingly revisiting their schemes’ investment strategy and considering whether the balance of risk and return remains appropriate for achieving their long-term target within the timescales required. For many this has led to, among other things, the decision to sell some or all of their illiquid assets...

Running an exclusive process when approaching the insurance market for a buy-in or buy-out can be a powerful move for schemes, says Hymans Robertson in a new guide published today Exclusive broking processes – when less is more. Possible benefits for schemes choosing to ‘go exclusive’ include a more nimble process than a traditional bulk annuity auction and generating engagement with insurers better suited to meet the scheme’s objectives. The leading pensions and financial services consultancy’s analysis shows that up to 30% of the buy-in and buy-out market in 2022 was made up of exclusive transactions.