PS in the press
"Complex problems, innovative solutions". Speaking on buyouts & valuations of corporate bonds, Richard Jones comments:
"Insurance companies are finding it very difficult to buy and sell corporate bonds at the moment because there can be a 20pc bid/offer spread. Insurers are withdrawing the guarantees they used to provide for up to three months. Now they're saying it's not guaranteed at all." Professional Pensions (Main), 11 December 2008
Speaking on mortality assumptions, Peter Black comments:
Punter Southall principal Peter Black explained these problems could be overcome by using different mortality assumptions for different purposes.
He said while trustees needed to set a very prudent assumption for valuation purposes – the assumption used for company accounting figures did not need to be as conservative.
Black explained: "In the past people have used very much the same assumption for company accounts and for what they actually fund the scheme on but company accounts are meant to be more of a best estimate.
He said: "There is definitely an argument that you could use something less prudent for accounting." Professional Pensions (Main), 11 December 2008
"FSCS confirms benefits coverage". Speaking on FSCS, Matthew Furniss comments:
"Until recently the thought of a major insurer going bankrupt would have seemed unthinkable given the high reserves that the FSA requires them to hold.
"This is no longer the case and we were receiving many enquiries from clients who were understandably concerned."
In October the FSA began a consultation on plans to scrap the 100pc band on the first £2000 of compensation for long-term insurance contracts. For these contracts compensation is based on the value of the policy as valued in a liquidation.
Punter Southall said the 100pc band would be removed in preference for a blanket 90pc protection for all benefits.
Furniss said: "News of the probable fall in the level of protection for the first £2000 of benefits is unexpected and unfortunate for any members with smaller pension pots that would be more affected.
"We will be monitoring developments carefully on behalf of clients to keep them updated." Professional Pensions (Main), 11 December 2008
"Pension funding carried more weight in UK deals". Speaking on pension funding, Chris Parlour comments:
"We've talked a lot about in the past three or four years.
"it affects every (company's) pension scheme" Pensions & Investments Online, 8 December 2008
"The EC has closed". Speaking on Solvency II, Jane Beverley is quoted:
Jane Beverley said the consultation reflected a growing recognition within Europe that it would be inappropriate for the Solvency ll directive to be applied to occupational pension schemes. Pensions Week, 8 December 2008
"FTSE 350 firms shift to more conservative mortality rate assumptions". Speaking on mortality assumptions, Joanne Livingstone comments:
"A lot of companies have recently switched their mortality assumptions.
"Compared with last year, more than twice the number of companies are now using mortality assumptions that are stronger than medium cohort. This suggests a growing herd instinct amongst employers in choosing their mortality assumptions.
"Employers may find themselves backed into a corner and forced to retain mortality assumptions that are more prudent than they would like in years when corporate bond yields are not giving them a free ride." Professional Pensions (Online), 8 December 2008
"Trustees to decide actuarial assumptions". Speaking on mortality assumptions, Joanne Livingstone is quoted:
"The regulator has moved with impressive speed to finalise its guidance given the lateness of the original draft guidance. However, time pressures remain on trustees as they seek to decide to reflect this guidance, especially where the regulator suggesting changes to their existing transfer value practices." Occupational Pensions, 1 December 2008
"Solvency II threat lifted in the short term." Speaking on Solvency II, Jane Beverley comments:
"We welcome the fact that the EC has kept the scope of its current consultation limited.
"This reflects a growing recognition within Europe that it would be inappropriate for the Solvency II directive to be applied to occupational pension schemes and it appears that this threat has been lifted, at least in the short term.
"It is important that the EC recognises the many different systems of providing pensions across Europe and allows member states the freedom to continue to regulate pension schemes in a way that reflects their particular circumstances." Professional Pensions Online, 1 December 2008
Punter Southall’s five point plan to help pension schemes weather the recession