October 2013 marks the first anniversary of the formal introduction of the new employer duties. In this note, we review developments since the largest companies have had to comply with the new duties, and look forward to what we can expect in the future.
What is the current position?
Actuarial valuations are undertaken based on market prices and yields on the date of the valuation. Assets are taken at market value and liabilities are priced using discount rates set with reference to gilts or other similar markets on the valuation date. Gilt yields have fallen significantly over recent years due in part to quantitative easing and this has led to widening deficits.
From October 2012, the largest employers started to auto-enrol staff into suitable pension schemes following the introduction of employer duties. The new regime is being phased in over a long period (more than 5 years), starting with the largest employers first.
We have produced a series of straightforward and focused briefing notes to count down to the introduction of the employer duties and auto-enrolment, taking you through the issues that you need to consider. As the regime takes effect over a number of years, many employers’ plans may only be at an early stage, so we will continue to produce briefing notes in the countdown series.