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TUC member Trustee News Summer 2012

Issue date

Download the newsletter (PDF file)


In this issue you'll find the following features and articles:

  • Incentive exercises
  • NEST eight golden rules on communication
  • Pension news in brief
  • Responsible investment round-up
  • DC pension charges
  • Small DC pots
  • And finally: Teeth and toasters


Welcome to the summer edition of TUC member trustee news

Another step towards auto-enrolment has now been put in place, with new legal duties preventing employers from inducing workers to opt out of pension schemes coming into force at the beginning of July. State pension reform, however, which is essential to underpinning workplace pension reform, has been pushed back, with further proposals not now expected until the autumn. A DWP spokesman has blamed the complexity of the current system and emphasized the need to get details of the reform right.

In the DB world, the Pensions Regulator's statement, 'Pension scheme funding in the current environment', has in general been welcomed, if somewhat cautiously. Employers and trustees will undoubtedly be able to find within it points which support their respective views on deficit recovery plans. But the key message is clear: trustees should continue to focus on the long-term financial health of their scheme and, where there is a deficit, to seek payments from the employer which are affordable, and which treat the scheme equitably with other cash demands on the employer. There is no change in the Regulator's position that technical provisions should be based on prudent assumptions, taking into account an assessment of the employer covenant. The statement, available on the TPR website, has been thoroughly analysed by all the usual commentators; all DB trustees will want to ensure they have read the statement and considered how it applies to the circumstances of their own scheme.

On DC, it's ironic, and worrying, that at the same time as governance issues (whether on stewardship, record keeping or charges) achieve ever higher prominence, the latest statistics from the Office for National Statistics show that the number of people saving in a workplace contract-based DC pension scheme has overtaken the number saving in a trust-based DC scheme: 8.8 per cent of the private sector workforce are now in a contract-based DC pension - up from 8.6 per cent last year - while 8.7 per cent are now in a trust-based scheme, a fall of 0.2 per cent in a year. Whilst not all trust-based schemes are run as well as they could be, contract-based schemes generally lack any structure to provide governance and look after member interests. There is an opportunity here for unions to push for workplace governance committees to monitor and review the performance and administration of contract-based DC schemes, to try to fill at least part of the governance gap that usually prevails.

Download the newsletter here (PDF file)

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