Developments in Employee Benefits law and practice

11 March 2019

Countdown Bulletin 44

HMRC’s latest Contracting-out Countdown Bulletin (no.44) provides updates on Scheme Financial Reconciliation. The Key extract is reproduced below.

We advised that if your scheme is in deficit following our financial reconciliation, then we expected letters to be with you the week commencing 15 April 2019 and that we need your payment by 21

May 2019 at the latest.

In order to give Pension Scheme Administrators more time to make payment, it is now expected that letters will be with you in the week commencing 1 April 2019.

Payment still needs to be made by the original date of 21 May 2019 at the latest.

In order to issue letters sooner, we have brought forward the scheme financial reconciliation run date.

This means that for schemes that have more than £1000 deficit, we will write off debt that was raised before 4 March 2013, this is 6 years before the new run date.

We have assessed the impact of the new write off date and can confirm that it is negligible.

TPR Annual Funding Statement

The Pensions Regulator has published its Annual Funding Statement, which provides the Pension Regulator's guidance on how DB schemes should approach forthcoming scheme valuations.

A JLT Alert on the Statement is available. 

Latest CMI mortality model published

The Continuous Mortality Investigation has released its latest Mortality Projections Model, CMI_2018. Compared to the last model (CMI_2017), CMI_2018 adds data on deaths from across the UK population up to the end of 2018 and places more weight on lower mortality improvements in recent years. Both changes will decrease projected life expectancies and therefore scheme liabilities – meaning projected life expectancy at age 65 will fall by almost half a year.

The updated model also introduces a new way to allow for higher or lower improvements in sub-populations (for example pension scheme members) compared to the population as a whole, which should provide a more intuitive way of reflecting such differences.

Financial Guidance and Claims Act Regulations set out new name for ‘SFGB’ 

The Financial Guidance and Claims Act 2018 (Naming and Consequential Amendments) Regulations 2019 have been published and name the Single Financial Guidance Body (SFGB) as the “Money and Pensions Service” (MPS).

A JLT Alert on the implications of this for scheme communications is available.

Contact:

John W. Wilson LLB(Hons) FPMI ACII, Head of Research| Email: john_wilson@jltgroup.com