in brief
- The Pensions Regulator has now decided not to introduce a
mortality assumptions trigger as part of their review mechanism for
scheme specific funding valuations but has made a comment about use
of a "medium cohort with a strong underpin".
- The Government is currently consulting on risk sharing schemes,
and several bodies, including the NAPF and the ACA have commented
on it.
- The Pensions Bill continues to progress but there remain
concerns about several aspects of it. The latest issues to arise
relate to the quality test that schemes will have to meet to enable
employees to be excluded from personal accounts, and how auto
enrolment will impact on the membership of schemes and the options
offered by employers.
- There has been another court case that looked at the
interpretation of the employer contribution rule and, in
particular, the meaning of the word "secure" in this context, ie
the company had to pay the contributions determined from time to
time by the trustees "to secure the benefits under the Scheme". The
question posed was did this enable the trustees to demand the full
amount required to buy out the liabilities as this was ultimately
the way that benefits would be secured on a winding up. The judge
ruled that it was not possible to attach a single meaning to the
word "secure" and that the wording used in this case should be
taken to imply a funding method that is appropriate to the changing
circumstances of the scheme in question.
It is unlikely that many schemes have the
word "secure" in their employer contributions rule and perhaps the
most obvious point that emerges from this case is that the wording
of each case has to be considered carefully and in the context of
the particular scheme in question. The other interesting point
about this case is that it related to Alitalia's scheme for its UK
employees.
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