Atkin Trustees September Newsletter

DWP Considers future options for DB schemes:   The Department for Work and Pensions has unveiled a significant initiative titled “Options for Defined Benefit schemes: a call for evidence.” This release is part of a broader governmental strategy aimed at bolstering investment in what it terms “productive finance.” The government’s vision for productive finance entails channelling investments towards equity capital and financial support for various businesses in the UK.  It also emphasises longer-term investments in less liquid assets.

The call for evidence document concludes that the precise direction of future policy remains undetermined. However, it outlines three fundamental principles guiding policy development: upholding fairness for defined benefit scheme members, prioritising a robust and diversified gilt market, and fortifying the UK’s competitive standing as a leading financial hub capable of sustaining public services.

One of the notable observations made in the call for evidence is the current lack of incentives for defined benefit (DB) schemes to invest with the aim of producing a surplus. It poses several questions, such as the conditions necessary for the extraction of surplus from a scheme and whether enabling this could lead to more risk-taking in DB investment strategies.  

The call for evidence also delves into the realm of pension scheme consolidators, exploring the potential pros and cons of establishing a public sector consolidator. This entity would facilitate long-term investment timeframes, supporting investment in productive finance within the UK. It raises questions about the forms of consolidation to consider, potential benefits and risks, and even contemplates the role of the Pension Protection Fund in this context.

Atkin Pensions as ‘the voice of small schemes’ has responded to the call for evidence giving the viewpoint of smaller schemes and their sponsoring companies. 

Pension Transfers – Vulnerable Members:  The Financial Conduct Authority (has recently launched a resource for financial firms, offering guidance on how to assist consumers with vulnerability traits when delivering pension transfer advice.

 In its latest initiative, the FCA emphasises the importance of vigilance when consumers seek advice regarding the transfer of defined benefit (DB) or other pension benefits. Firms are encouraged to be attuned to potential signs of vulnerability and to foster an environment where consumers feel comfortable sharing their unique needs.

The webpage serves as an informative hub for financial institutions, equipping them with insights and strategies to provide appropriate support to vulnerable consumers. The webpage can be found here:  FCA Webpage Pension Transfers.

PASA – Guidance on Data:   PASA has updated its Data Accuracy Guidance, a vital resource for pension schemes. Effective data management is crucial, extending beyond dashboards to prevent overpayments, fraud, and breaches. This guidance emphasises accurate key data points and provides valuable validation resources. Access it here:  

PASA Data Accuracy Guidance.