UK roundup: PPF names CFO; PLSA pension priorities for budget

The Pension Protection Fund (PPF) has announced that Lisa McCrory has been appointed as its new chief finance officer (CFO). She will be responsible for leading the PPF’s actuarial financial management, finance, commercial and internal audit departments and will do this alongside her current role as chief actuary.

Oliver Morley, chief executive officer, said: “Our priority is to serve our members and we continue to do this by measuring and managing the risks and uncertainties we face in the future.

“As we continue to grow, analysing our long-term funding strategy becomes more important. Lisa’s wealth of experience and proven leadership skills puts us in a steadfast position.”

Since her appointment as chief actuary in September 2018, McCrory has been responsible for providing actuarial advice to the board of the PFF.

She has also been responsible for the annual valuation of the fund and has played a leading role in enhancing its modelling capabilities whilst considering the next evolution of the organisation’s funding strategy.

McCrory has also been covering the role of CFO on an interim basis since October 2019.

She said: “Having grown my career at the PPF over the past 10 years, I am excited to be able to continue to shape the PPF’s funding strategy and lead my team to ensure the PPF is well-placed to handle any eventualities the future of the pensions’ landscape may bring.”

PLSA sets out pensions priorities for budget

The Pensions and Lifetime Savings Association (PLSA) has set out the five key measures it would like to see in the Chancellor’s upcoming budget to support UK pension schemes and savers.

  1. Pensions tax relief – There are three areas where the PLSA believes changes can be made to simplify the pensions tax relief system: ensuring low earners get full tax relief in net pay schemes by amending HMRC systems; removal of the high earners taper to the annual allowance; and a review of the Money Purchase Annual Allowance.
  2. Continued support for the success of automatic-enrolment – To improve adequacy levels, the PLSA proposes increasing automatic enrolment contributions to 12% of salary by 2030, split 50-50 between employer and employee. The association also urges the UK government to remove the Lower Earnings Limit and lower the minimum age for automatic enrolment from 22 to 18.
  3. Long-term care – A sustainable funding solution that will endure for a generation must meet four tests: maintain retirement income adequacy, universality, fairness and affordability.
  4. Ensuring the future of defined benefit schemes (DB) through enabling superfunds – Despite over £120bn (€142bn) of special contributions and close to £400bn in overall contributions, the majority of DB pension schemes remain in deficit, meaning three million scheme members were at risk of not receiving their full benefits. The PLSA encourages the government to bring forward legislation that will enable the creation of pension superfunds to address the problem.
  5. Proposed changes to the Retail Price Index (RPI) – Increases in millions of savers’ pensions are promised against RPI increases, which are hard-wired into both legislation and scheme rules and cannot be changed easily (as many High Court cases have proven). For individual savers, changes could lead to a reduction of up to 15% of their retirement income. The PLSA urges HM Treasury to engage with the industry and give consideration to a timeframe and approach that mitigates the impact on pension savers.

Nigel Peaple, director of policy and research at PLSA, said: “While automatic enrolment has been a huge success in getting most employed people saving for retirement, more must be done to ensure they are saving enough to have an adequate retirement income.”

nigel peaple

He said the PLSA has proposed several small, targeted changes that will make the pension system work better.

“We believe these measures will help ensure the UK government goes on supporting UK pensions, millions of savers and the wider UK economy.”

PLSA’s full budget submission can be found here.

APPT launches accreditation for professional trustees

The Association of Professional Pension Trustees (APPT) is launching a new accreditation for professional trustees, opening applications for it in April.

The official accreditation framework is designed to promote and maintain the highest possible standards across the professional trustee industry, APPT said.

The association said that in order to become accredited, professional trustees will need to demonstrate their competency through passing exams covering technical and soft skills, as well as demonstrating that they are fit and proper, through criminal record and professional reference checks.

Accredited trustees will be required to comply with a rigorous professional standards code, developed in close consultation with The Pensions Regulator (TPR), and will be expected to complete a minimum of 25 hours of relevant continuing professional development each year in order to maintain their status.

The move follows TPR’s announcement this week that it plans to contact a large number of pension schemes to test levels of trustee knowledge and understanding and considering “appropriate action” where they fall below expectations.

For its new programme, the APPT will regularly review the professional standards underpinning the accreditation process, with a view to continually raising standards across the industry.

Nita Tinn, APPT’s chair, said: “Accreditation represents a step-change for the professional trustee sector and will play a vital role in maintaining and enhancing standards across the industry, thereby securing better outcomes for all scheme members.

“It is clear from our work with The Pensions Regulator and the wider sector in devising this process that the industry needs a single set of standards, overseen by a recognised representative body.”

She said she encourages all professional trustees to register for this official accreditation process and recommends that sponsor companies engaging a professional trustee should always check their accreditation status.

David Fairs, executive director of policy at TPR, said: “We welcome the APPT’s accreditation for professional trustees to ensure new standards created to improve governance and administration are delivered in a clear and structured way. The standards are an important step to increase protection for savers and I encourage professional trustees to fully engage with accreditation programmes.”

PTL launches GAA for investment pathways

PTL, the independent trustee and governance services provider, has announced that its Governance Advisory Arrangement (GAA) is already accepting clients offering investment pathway solutions for non-advised pension drawdown.

Keith Lewis, client director and chair of the PTL GAA, said that all providers planning to offer non-advised drawdown must have an independent governance committee (IGC) or GAA in place by 6 April 2020 to allow the committee to assess the design of pathway solutions before they are offered to consumers.

“There is much for providers to do before investment pathways come into force, within very tight deadlines,” he said.

“We have updated our methodology and terms of reference to reflect the extended remit over investment pathways, and also the need to assess ESG (environmental, social and governance) factors,” Lewis said.

He added that PTL is ”ready to work with all providers of non-advised drawdown as they finalise the design of their investment pathways”.

The extension of the GAA’s remit follows two Financial Conduct Authority mandates that providers of drawdown solutions to non-advised customers create four investment pathways, and that the value for money of these pathways is assessed by an IGC or GAA.

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