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Defined Benefit Pensions

Occupational defined benefit (DB) pension schemes are declining as employers struggle to meet the guaranteed retirement incomes their schemes promised due to pressures arising from increasing longevity, increasing costs and low-return market conditions

After the 2008 financial crisis, many DB schemes’ funding deficits escalated, resulting in a number of high profile cases where employers were no longer able to meet their pension liabilities, for exmaple the Tata Steel, BHS and Carillion schemes. As those cases illustrate, DB schemes are complex, requiring the right balance between long-term sustainability, affordability and member protection. 

Current Developments in the DB Landscape:

  • In 2017, the Department for Work and Pensions (DWP) issued a consultation on the future of DB pensions to ascertain the challenges currently facing  schemes, opportunities to improve them and means to protect scheme members. 

  • In March 2018, the DWP published Protecting defined benefit pension schemes – a White Paper setting out the Government’s views on potential solutions to help improve the system.

  • In April 2018, the Work and Pensions Select Committee launched an inquiry on the DWP’s White Paper The results of the inquiry will inform the subsequent consultations on various aspects of the White Paper, including consolidation, due later in 2018.

  • At the end of June 2018, the DWP issued a consultation with proposals to strengthen The Pensions Regulator’s powers to enable it to intervene and ssue fines or criminal offeces for wilful or reckless behaviours leaving pensions schemes at risk.

 

Contact Details

For further information, please contact the Policy Team at

Policy@actuaries.org.uk

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Events calendar

  • Autumn Lecture 2020: Professor Elroy Dimson

    Online webinar
    14 October 2020

    Spaces available

    Many individuals and institutions have a long-term focus, and invest funds for the benefit of future generations. Their strategy should reflect their long horizon. University endowments are one of the oldest classes of institutional investor, and I will present the first study of the management of these endowments over the very long term.

  • GIRO Conference 2020 Webinar Series

    Available to watch globally in November.
    02-13 November 2020
    Spaces available

    This year's GIRO has been re-designed as a virtual conference to offer members and non-members the opportunity to get up to date content from leading experts in the general insurance field via online webinars. All sessions will be recorded and made available to purchase and re-watch post-event on the IFoA's GI Online Learning Resource area

  • Life Conference 2020 Webinar Series

    Online
    16 November 2020 - 27 November 2020

    Spaces available

    This year's Life Conference has been re-designed as a virtual conference to offer members and non-members the opportunity to get up to date content from leading experts in the life insurance field via online webinars. All sessions will be recorded and made available to purchase and re-watch post-event on the IFoA's website.

  • Spaces available

    The webinar will discuss the challenges and opportunities schemes face in evaluating end game options, choosing a target state and understanding the impact this strategic decision could have on member outcomes long after the “end state” is reached. Adolfo, Kevin and Rhian bring over 60 years of experience in the industry and a variety of perspectives as scheme actuary, covenant adviser, trustee, de-risking adviser and insurer.

  • Spaces available

    Cash-flow driven investing is a game-changer for DB pension funds navigating their end-game. Suitable for sponsors who want to reduce risks on their balance sheets. And for trustees, it shifts the focus to providing greater certainty of returns, managing funding level volatility and ensuring they have enough income to pay cash-flow requirements.

  • Spaces available

    Patrick Kennedy, Partner at Gateley Legal and Founding Director of Entrust (a leading professional pensions trustee company), will be delivering an update on the latest legal developments during the course of 2020. With both a pensions legal perspective and over 25 years of trustee service, Patrick will seek to highlight how the letter of the law has continued to evolve against the backdrop of a difficult and challenging year

  • Spaces available

    The talk will provide an understanding of the priorities and relationships between deficit reduction contributions, in the context of wider scheme funding, and different types of value outflow from the employer based on the working party’s recently published report.