UK pension schemes being hit with large and immediate variation margin calls

Some UK pension schemes are being forced to try and meet large (and immediate) margin calls, of up to £100 million, on the interest rate derivatives and asset swaps they hold as part of their liability driven investment (LDI) strategies. This follows the recent sharp falls in the value of gilts and sterling which have … Read more

FCA confirms final rules for new Consumer Duty and gives firms more time to comply

The FCA has published the final rules and guidance and accompanying non-Handbook guidance relating to the new Consumer Duty (the Duty). While the nature and scope of the Duty remains largely unchanged in most areas, the final rules and guidance contain some significant changes and clarifications relating to how the Duty will apply in relation to distribution chains, closed books, wholesale markets and … Read more

New legislation will require DB schemes to target low risk funding and investment strategy

After a significant delay, the Government has finally published its consultation on draft regulations that will underpin the new long-term funding and investment requirements for UK defined benefit (DB) occupational pension schemes contained in the Pension Schemes Act 2021. These new requirements are designed to drive DB schemes towards a “low dependency” funding level by … Read more

How far can trustees go when setting ‘net zero’ targets?

Following his recent talk at a joint Association of Pension Lawyers and Society of Pension Professionals Event on ‘ESG and Trustees’ fiduciaries duties’, Michael Aherne considers how trustees should approach setting a ‘net zero’ target for their scheme. Read more

Pension Disputes Bulletin – May 2022

Welcome to the latest edition of our Pension Disputes Bulletin. Our regular disputes bulletins contain summaries of key cases, Ombudsman decisions and regulatory activity and highlight emerging risks for pension schemes, providers, sponsors, administrators and other service providers. In this edition we consider the implications of: the FCA’s latest proposals for the new Consumer Duty; … Read more

Regulator publishes latest Annual Funding Statement

The Pensions Regulator has published its latest Annual Funding Statement. Most of the messages are consistent with those contained in last year’s statement but, as you might expect, this year’s statement emphasises the need for trustees to assess the impact on their scheme and sponsor covenant of high inflation, the prospect of higher interest rates … Read more

Pensions and ESG Ep 6 – A Smart approach to ESG

In this latest podcast from the Herbert Smith Freehills’ pension team, Mark Howard, Of Counsel, discusses the latest developments in the world of ESG with Head of Investment Proposition at Smart Pension, James Lawrence. In their conversation, Mark and James discuss: How Smart Pension is responding to investment in Russia after the invasion of Ukraine; … Read more

DWP launches further consultation to facilitate investment in illiquid assets

For some time, the Government has been trying to encourage greater investment in illiquid assets (such as infrastructure projects) by defined contribution (DC) pension funds. As part of this, the DWP launched a consultation last November on proposals to exclude well-designed performance fees from the DC charge cap, which applies to default investment funds within … Read more

Pensions and ESG Ep5 – ESG, the ‘teenage years’

In this latest podcast in our Pensions and ESG series, Head of Responsible Investment at Royal London Asset Management (RLAM), Ashley Hamilton-Claxton joins our Pensions Professional Support Consultant, Tim Smith to discuss recent ESG developments and how Royal London and its clients are responding to these. In this podcast, Ashley discusses: • how the measurement … Read more