Robin Preijer’s Post

Will there be another end game option for schemes in a couple years? Amongst other things, the DWP thinks the cost of benefit replication is a particular challenge for small schemes looking at buyout or a superfund. The PPF has noted that simplifying benefits would also support lower administration costs and could make benefits easier for members to understand. This would require careful consideration by transferring trustees. While scheme benefits before and after transfer would have to be actuarially equivalent in value, if they are not the same there will be winners and losers. Trustees will need to understand the extent of this for their own scheme and will want to understand potential residual risks following transfer. Read more in my article below.

🗣 PENSIONS AND SOCIAL INSURANCE BENEFITS TO SEE HIGHEST INCREASE EVER? According to a proposal by the Government, starting from July 1st, the pension and social insurance benefits are expected to be adjusted upwards by up to 15%. If this proposal is approved, it will mark the highest increase to date. The Government has proposed that from July 1, 2024, the current pension and social insurance benefits be increased by 15% (based on the benefits received in June 2024). This adjustment will apply to more than 3.3 million people, including those receiving pensions from compulsory social insurance and those participating in voluntary social insurance. For those receiving pensions before 1995, if their adjusted benefits are below 3.2 million VND per month, they will receive an additional increase of 0.3 million VND per month. For those whose benefits fall between 3.2 million VND and below 3.5 million VND per month, the adjustment will bring their benefits up to 3.5 million VND per month.

Pensions are a crucial part of our economy and provide a great means for workers to prepare for a comfortable and enjoyable retirement. Insurance Ireland's Pre-Budget Submission 2025 calls for improvements in Ireland's pensions environment, to make it more sustainable and transparent. The first action area to ensure Ireland has a sustainable and transparent pensions environment is to ensure equity and provide further clarity around the implementation of Ireland's proposed Automatic Enrolment (AE) Pension System. Insurance Ireland supports the introduction of the AE System, which would complement the current pensions landscape and aid workers in planning for retirement. Insurance Ireland urges the Government to address two key issues before implementation: ✅ strong consumer protection regulation and; ✅ ensuring a level playing field between occupational schemes and AE. It appears AE will be held to lower standards than the existing private system. AE will not be an institution of occupational retirement provision (IORP), a Master Trust or indeed, a pension, thus AE schemes will not be held to the same pensions-related legislation as the private system. While regulated by the Pensions Authority, the regulatory oversight will be based on the Automatic Enrolment Retirement Savings System Bill 2022 (the Bill). Issues also remain with the inflexibility of the AE system, especially for women and carers, but also with potential issues relating to additional voluntary contributions (AVCs). You can find more info on this topic in our full Submission here: https://lnkd.in/eXRuXnRJ #InsuranceReform #Insurance #Reinsurance #Ireland #Pensions #AutoEnrolment

Writing in Pensions Expert, partner Sonya Fraser discusses the legal risks inherent in the government's plan for the Pension Protection Fund to become a public consolidator for schemes “unattractive” to commercial providers, under the 'Options for Defined Benefit Schemes' consultation.   Read more by following the link below.   #UKpensions #DefinedBenefit

The link between employer and scheme is proposed to be severed when the scheme transfers into the consolidator, enabling a “clean break”. However, for any underfunded schemes, the employer would be contractually required to pay off the deficit over time. In the unfortunate scenario that the employer becomes insolvent before fully paying off all the instalments, it is proposed that the relevant group of members would have their benefits reduced in line with the proportion of instalments made. Depending on the amount owing at the relevant time, this could mean affected members transferring into the “lifeboat” arm of the PPF. Read more below.

As employers look to finalise budgets for 2024 there are some very challenging issues: • Rising costs • Demand for salary increases • Double digit rises in Health Insurance funding costs • The ongoing evolution of work flexibility • Pension changes On the point of pension change many employers have just dealt with the implications of #IORPII and they are now faced with tackling the implications of Auto Enrollment. The government continue to target the second half of 2024 for implementation but with so many outstanding questions this timeline is likely to be very challenging to meet. In today’s The Irish Times Ray Mc Kenna gives some great insights to some of the challenges faced to get Auto Enrollment operational in 2024. #pensions #autoenrolment

A key structural question is whether such a consolidator should operate with multiple segregated sections – with ring-fenced assets and liabilities – or as a single, pooled fund. The DWP favours an unsegregated structure to enable the consolidator to benefit from economies of scale, and the PPF appears to support this approach. That presents a challenge if underfunded schemes are allowed in. Read more from Sonya's article by following the link below.

Unlike with insurance buyout and superfunds, where scheme benefit structures are broadly replicated, there would only be standardised benefit structures on offer from the consolidator. The PPF’s discussion paper includes some initial views on this and a proposed “benefit choice menu”. The rationale here is that the DWP thinks the cost of benefit replication is a particular challenge for small schemes looking at buyout or a superfund. But changing people's rights does introduce new legal risk. Read Sonya's article by following the link below.

BLOG | The radical pot for life proposal that could upend Automatic Enrolment and its success Could the proposed changes to workplace pensions mean an end to the success of Automatic Enrolment? We commissioned new research from WPI Economics to examine the challenges and potential pitfalls of radical reform. Find out more in Ben Infield's latest blog - https://lnkd.in/ejXKsFTf #AssociationofBritishInsurers #Insurance #LongTermSavings #PotForLife #pensions #AutomaticEnrolment

Published on April 2, 2024 by the European Insurance and Occupational Pensions Authority (EIOPA), this document includes the technical specifications pertaining to the Insurance Sector Stress test exercise for 2024. #stresstesting #insurance #insurancesector #EIOPA #EU #stresstest #riskmanagement #solvency #capitaladequacy #GRC