Pension Fund – Mon Best Of Sat, 09 Oct 2021 04:00:51 +0000 en-US hourly 1 Pension Fund – Mon Best Of 32 32 COP26 climate summit: why Scottish pension funds have never had a better time to commit to net zero carbon emissions – Natalie Jackson Sat, 09 Oct 2021 04:00:51 +0000
Pressure is mounting on investors to stop funding companies whose operations produce significant carbon emissions (Photo: Justin Tallis / AFP via Getty Images)

In response to the climate emergency, many cities, regions, businesses and investors are pledging to achieve net zero by 2050 at the latest. Nicola Sturgeon declared a climate emergency in April 2019 and the Scottish government has pledged to a net zero society by 2045 – five years ahead of the rest of the UK.

Even among those who have yet to declare a climate emergency or set a net zero commitment, there is recognition of a major problem that something urgently needs to be done about.

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So far, the commitments made by municipal leaders to act on the climate have been supported by various initiatives, such as the replacement of municipal car fleets with electric vehicles, the proposal to introduce low emission zones for greener cars and bicycle rental programs to encourage people to swap four wheels for two as they roam the towns of Scotland.

But perhaps their greatest power could be the impact of the decisions they make about where to invest retirement savings.

Scottish local government pension schemes serve over 500,000 retirees and members, the largest being the Lothian (assets of around £ 8 billion) and Strathclyde (assets over £ 26 billion). Their potential to invest for the good of the planet is enormous.

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Climate change: Humanity risks boiling like the proverbial frog as the world s …

Now, as we prepare for COP26 in Glasgow, the Scotland-based Global Ethical Finance Initiative (GEFI) is working with local government pension plans to help them overcome the challenges of their journey to zero net.

Net zero means striking a balance between greenhouse gases emitted into the atmosphere and those removed, and it is clear that one of the biggest challenges will be developing a credible plan to achieve this.

More than 80 senior financial leaders from around the world gathered last month after launching our article for pension providers and the road to net zero that lays bare the gravity of the situation. The document identifies the main challenges that pension funds face in their journey to net zero: precise and comprehensive data on the climate impact of investments; lack of knowledge of pension fund administrators and staff; and the inability to engage in climate action.

The paper examines questions such as “is divestment the answer?” And “Can pension providers ignore climate change?” “

Many climate activists are pushing plans to immediately withdraw their money from polluting companies. This could send a strong message, but we don’t think divestment is the primary strategy to use. It just shifts the problem elsewhere, and a more effective approach is active engagement to encourage positive change.

It is not only environmental activists who are calling for this action. The government and consumers want it too. In fact, one only needs to look at the policy papers of major political parties to predict that there will soon be legal and reputational hurdles to making money from investments that harm the planet.

Climate risk is a financial risk and a reputational risk. This is why the programs in Scotland should get their house in order now and, if done right, they will even have a business model and expertise to export to the rest of the world. A recent Aviva survey showed that two-thirds of millennials believe it should be mandatory for pensions to achieve net zero emission status by 2050.

GEFI has also conducted its own research in Scotland on attitudes to climate change and leadership.

The latest YouGov poll found that more than half of Scots don’t trust world leaders to come up with a solution to save the planet at the UN COP26 summit, although 60% felt the talks would be essential to cope. to the climate emergency.

Two-thirds believe Scottish financial institutions have a vital role to play in reducing emissions. More than a third said they only wanted their money to be invested in companies with a positive impact on the environment.

While confidence in world leaders is low when it comes to solving the climate crisis, it is clear that others need to step up their efforts. This is why big business and financial institutions, not only in Scotland and the UK, but around the world, need to take major responsibility.

There is a lot of green electricity in people’s pension funds, and it is time to use it more efficiently.

So what can Scottish pension providers actually do to become net zero, or at least start now on the road to it?

GEFI’s “transition roadmap” will define specific actions for pension providers so that they take action now in their climate journey.

As Adam Matthews, Director of Ethics and Engagement in the Church of England Pensions Board investment team, puts it: “Setting a long-term net zero goal is the game. easy ; the challenge is to have a credible and transparent framework that allows your fund to translate intention into practical decisions and actions.

The commitment of pension providers to this roadmap will raise Scotland’s profile as a country serious about a sustainable and even prosperous journey to net zero, and this would happen as the eyes of the world shift. are looking to an event in Glasgow to offer exactly these kinds of solutions.

Natalie Jackson is the lead author of the Global Ethical Finance Initiative, Pensions provider and the path to net zero report. GEFI is driving positive change in the financial sector to act on the United Nations Sustainable Development Goals, working with partners such as the Scottish Government and the United Nations Development Program

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Blair pension fund improves | News, Sports, Jobs Thu, 07 Oct 2021 04:11:57 +0000

HOLLIDAYSBURG – The latest report on the Underfunded Blair County Pension Plan shows significant improvement and no projection of the cash strapped plan.

“We are on the road to full solvency” County pension board chairman Bruce Erb told other board members on Wednesday before tempering his statement with: “We are still the worst funded plan in Pennsylvania. “

Erb’s findings were based on a report that David B. Reid Sr., vice president of CBIZ Retirement Plan Services, presented to the county retirement board.

In preparing the report, Reid looked at the assets, liabilities and related factors of the pension plan to calculate how much the county general fund is expected to contribute to the plan in 2022 to meet obligations for the next 30 years.

His recommendation was $ 5.2 million, an amount the county should be close to hitting based on current trends.

For 2021, the county has budgeted $ 4.75 million for the pension plan, an amount expected to be reached in December.

For 2022, the contribution is expected to be around $ 5 million, according to a policy approved earlier this year.

Comptroller AC Stickel, who sits on the pension board with Commissioners Erb, Laura Burke, Amy Webster and Treasurer Jim Carothers, called Reid’s report on pension plan improvements as “Best news for decades. “

Erb recalled that when he and Stickel joined the pension board in 2016, actuarial reports predicted the fund would run out of cash in 2025.

In February 2016, CBIZ actuary Alvin Winters acknowledged that the forecasts were correct until 2014, when the Commissioners began setting aside $ 2 million per year for the pension, using the proceeds of the pension. sale of Valley View Home.

As commissioners continued to increase contributions to pension funds, the predicted year for the lack of money was pushed back into the 2030s and 2040s.

Reid said his calculation for the 2022 contribution, without an insolvency year, was based on projections spanning 30 years.

The calculation reflects a 7% return on investment, which investment adviser Pat Wing acknowledged as a bit conservative.

Reid’s report showed that pension plan investments returned 11.2% in 2020 and 19% in 2019.

In the early 2000s, when the commissioners let several years go by without contributing to the general pension fund, they spoke of depending on investment returns to maintain the solvency of the plan.

Stickel criticized this tactic and showed no interest in revisiting it.

“Yes, the report showed we’ve had a good two years, but the reality is we won’t always have that. “ said Stickel.

Reid’s report showed that the plan’s investments suffered a 4.3% loss in 2018 and a historic loss of over 26% in the 2008 stock market crash.

Reid’s report also showed total pension plan liabilities to be $ 69 million, down from $ 94 million last calculated, reflecting pension payments owed to current and future retirees.

This calculation also reflects the adoption of the policy adopted earlier this year, encouraging the county to increase its annual contribution to the pension plan by 5% or $ 250,000, whichever is less, in order to reach the level of. recommended contribution.

Erb said the county must follow this policy and current practices to safeguard the future of its pension plan.

“We’re not going to run out of money if we stay the course. “ said Erb.

Mirror staff editor Kay Stephens is at 814-946-7456.

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Pension fund assets reach N13trn – The Sun Nigeria Wed, 06 Oct 2021 03:59:41 +0000

Of Joseph inokotong, Abuja

The The National Pensions Commission (PenCom) has accumulated pension assets of over 13 trillion naira, which have been invested in various aspects of the economy.

This was revealed by the Director-General of the Commission, Aisha Dahir-Umar, in her message of goodwill during the awareness program on “the eradication of pension fraud in Nigeria”, held yesterday in Abuja in partnership with the Economic and Financial Crimes Commission (EFCC).

She said, “So today we have an industry that has accumulated more than 13 trillion naira in pension assets, invested in various aspects of the economy and is still growing.”

DG PenCom pointed out that the problems of fraud and mismanagement in the pension sector in Nigeria were among the reasons which necessitated the 2004 pension reform by the federal government.

According to her, the Pension Reform Act 2004, which was later revised and enacted in 2014, introduced legal and institutional frameworks aimed at tackling the decay that characterized the pension administration before the reform.

“The law also created PenCom to regulate and oversee all pension matters in Nigeria, including the licensing of pension fund administrators (PFAs) and pension fund custodians (PFCs). The Transitional Pension Scheme Directorate (PTAD) was also created by the PRA 2014 to transparently administer the defined benefit scheme (DBS) for retirees exempt from the contributory pension scheme (CPS). These measures have significantly restored credibility and confidence in Nigerian pension systems, ”said Dahir-Umar.

In accordance with its statutory mandate under Article 23 (f) of the PRA 2014, it noted that PenCom has regularly undertaken public education, information and awareness campaigns on CPS and other issues. relating to pensions, noting that it has also developed and established structures, systems and procedures that ensure transparency, accountability and efficiency in the administration of pensions in Nigeria.

According to her, these systems and procedures have become benchmarks for other African countries, many of which have made study visits to the Commission.

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UK pension funds Transport for London and Avon set net zero targets Mon, 04 Oct 2021 16:03:20 +0000

The Transport for London pension fund aims to cut carbon emissions by more than half by 2030 and fully by 2045, the £ 13bn ($ 17.8bn) fund announced on October 1 .

The directors of the pension fund said in the statement that the net carbon reduction strategy “is arguably the most important development in the sustainability of the fund to date.” Directors said they started measuring the carbon footprint of the companies it owns as a result of the 2016 Paris Agreement. This has led to a policy of excluding coal and at least 15% of the company’s assets. funds in ESG investments.

The latest decision to reduce carbon emissions by 55% no later than 2030 and 100% from a 2016 baseline no later than 2045 applies to all of the fund’s assets and “plays an important role in the long-term value creation of the fund’s investment portfolio, “the statement said.

The goal of net zero by 2045 is ambitious, the directors said, but “fully consistent” with their fiduciary responsibility to generate returns for the long-term financial health of the fund.

Separately, Avon Pension Fund, Bristol, England, said on Monday that new climate change targets call for reducing absolute emissions from equity portfolios by 43% by 2025 and 69% by 2030, for compared to its benchmark emissions for 2020.

The £ 5 billion local government pension fund said in a press release that it expected to be net zero by 2050.

Avon will transform its £ 780million low-carbon equity portfolio strategy into a new Paris-aligned benchmark developed by FTSE Russell and Brunel Pension Partnership. The index is designed to reward companies generating green revenues and aligned with the goals of the Paris Agreement.

Avon said in the statement that by investing in PAB, the fund is expected to achieve annual emissions reductions of at least 7%.

The pension fund will reduce its allocation to emerging markets due to the challenge of managing the financial risk of climate change, while in developed markets where most of its capital is allocated, “it can exert greater influence”, a- he declared. The pension fund has also made significant progress in reducing emissions by working with the Brunel Pension Partnership, ClimateAction 100+ and Institutional Investors Group on Climate Change.

Brunel Pension Partnership’s IT director David Vickers said in the Avon statement that the new Paris-aligned indices “provide the industry with new tools to implement the Paris Agreement. We call on investors to use it quickly. benchmarks in their quest to support climate transition. “

Pension fund managers could not be reached immediately for further information.

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Pa by SEC. A survey of school pension funds examines gifts and travel from staff at Wall Street companies. Spotlight Pa Sat, 02 Oct 2021 15:29:32 +0000

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Harrisburg, PA – The United States Securities and Exchange Commission has expanded federal oversight of Pennsylvania’s massive public school retirement system, with fund staff providing freebies to hundreds of consultants and investment managers from Wall Street. Requested a record indicating whether it has been replaced.

The SEC’s new 30-page subpoena will be filed six months after the Federal Bureau of Investigation in Philadelphia and the FBI. Opening of a criminal investigation into possible corruption It’s tied to the inflated ROI and Harrisburg’s land deals at the agency.

Until October 8, the Commission told PSERS, a state agency that invests $ 70 billion in the pensions of 500,000 active and retired school staff, “Compensation, Compensation, Redemption, Money, Gifts, Rewards, PSERS. “Travel or anything of any value” exchanged between agency staff and fund managers and consultants.

PSERS declares in its ethics policy for its 500 employees that “employees must not seek, receive or receive gifts for personal use, whether directly or indirectly”. spells out clearly. Governor Tom Wolf has imposed similar bans on workers in all states.

Former SEC attorney Edward Cider, who specializes in forensic investigations into the pension system, said Thursday he was surprised by authorities’ investigation into the public pension system.

“It’s unheard of,” he said. The SEC generally focuses on corporations and the securities market.

The summons was sent to PSERS chief counsel Jackie Lutz last Friday. It is not known which company is suspected. Instead, educate yourself on pension fund transactions with an extensive roster of 180 outside fund managers, investors, hedge funds, private equity firms, and financial consultants. In fact, the SEC is a mirror PSERS list published of 6 pages From these external companies in the attached summons

PSERS pays these companies more than $ 500 million per year.

Most are investment managers who invest billions of dollars in PSERS in private and public companies around the world, from industry giants like BlackRock to small venture capitalists in Pennsylvania. A few act as intermediaries between PSERS and fund managers, helping agencies to assess their performance.

The Commission’s investigation does not mean that “PSERS or anyone else has concluded that they have broken the law” or that the authorities have a “negative opinion” of anyone. Heidi M. Mitza, senior executive adviser to the SEC, wrote in the summons. “We are trying to determine if there has been a violation of federal securities law.”

PSERS declined to comment on the SEC investigation, as well as the criminal investigation. Some companies on the subpoena list also declined to comment.

In addition to its retirement plan, the SEC is also known to have submitted a subpoena to at least one major fund consultant, Hamilton Lane, a conshohocken firm specializing in private equity investments that is not available on the stock market. .. “Unfortunately, we cannot discuss this issue,” spokeswoman Kate McGann said.

Most of the SEC’s demands are to repeat what federal prosecutors had done before when subpoenas first appeared in PSERS, a taxpayer-funded retirement system for public school employees. Request.

The SEC, like the prosecutor, requested all documents, reports and emails regarding the erroneous December council decision to adopt too many numbers for financial gain.

In April, the board denied the number as false and adopted a new lower number for profit. Profit performance was degraded enough to enforce state law, forcing 100,000 lower-level school staff to pay an additional $ 26 million to the pension system. The SEC asked for information about the fund’s internal investigation into the initial adoption of the wrong number and how it made the mistake in the first place.

Treasury Secretary Joseph Torsella, a key critic of the PSERS board, warned his staff relied on unaudited numbers to measure performance before the panel adopted the wrong numbers. low.

His warning was dismissed as unfounded by the fund’s executive director, Glengrell, and chief investment officer, James H. Grossman, Jr.

In the summons, the SEC requires a document or communication regarding “a decision to use unaudited financial information to calculate the average rate of return for PSERS.” We are looking for material from January 1, 2020 to today.

Inquirer and Spotlight PA First subpoena reported on Saturday.. Bloomberg News then obtained a copy of the document, followed by the press.

A former subpoena of a federal prosecutor, also obtained by Inquirer, said the criminal investigation had focused on the potential for “honest service” fraud and transfer fraud. Under the key United States Supreme Court rulingThe prosecutor, in fact, must prove a bribe or kickback to prosecute the authorities for sincere non-service.

The federal subpoena also demanded that, unlike the SEC, the PSERS purchase parking lots and industrial buildings along four city blocks in downtown Harrisburg for redevelopment.

The SEC does not lay criminal charges or jail anyone. The remedies include fines and reform decrees. From time to time, agencies prohibit violators from working in the financial industry.

In the summons, the committee found it difficult to ask not only the cashier employees to receive the gifts, but also the gifts that the staff may have given to strangers. More specifically, we ask for information on trips made by our staff.

Avril, investigator First revealed About 40 members of the fund’s elite investment board spend a lot of money when their financial professionals travel the world to verify their investments.

This article details hotel rates, including $ 1,178 per night in New York City, $ 1,144 per night in Boston and $ 955 per night in Beverly Hills. Airline costs are even higher, with 15 fares exceeding $ 11,000 between 2017 and 2019.

In complex arrangements, an external fund manager booked all travel arrangements for PSERS staff and paid for them first. According to fund data, over 100 PSERS entrepreneurs (a majority) did so in 2019.

The fund claims the trip was not a giveaway because the manager then billed the pension system for the cost.

PSERS Abandoned this method He dealt with the trip in July and now says he will pay his way from the start.

In testimony to the US Senate earlier this month, the election of President Joe Biden as SEC Chairman Gary Gensler called for increased scrutiny of private investment managers managing billions of dollars in severance. The manager can have. “

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Pa by SEC. A survey of school pension funds examines gifts and travel from staff at Wall Street companies. Spotlight Pa

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Tata Asset and Max Life Insurance obtain authorization to set up pension funds Fri, 01 Oct 2021 17:43:00 +0000

Tata Asset Management and Max Life Insurance Co recently received a green light from the pension sector regulator to create pension fund managers, PFRDA chairman Supratim Bandyopadhyay said on Friday.

“We had received two (proposals) … our board approved both. It will take them about six months to set up their pension funds. One is promoted by Tata AMC, so this is from the industry. mutual funds, the other will be promoted by Max Life Insurance which is a strong life insurance company, ”he said speaking to the media on NPS Diwas.

In July, the Pension Fund Development and Regulation Authority (PFRDA) opened the “on the fly” registration of pension fund managers.

Bandyopadhyay said next year that the regulator will open “on the fly” registration in the first few months of the fiscal year.

(This story was not edited by Business Standard staff and is auto-generated from a syndicated feed.)

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Warwick pension fund investments up 31.8% for the year Thu, 30 Sep 2021 14:24:13 +0000


In what is considered the biggest year-over-year gain since their inception, the city’s four pension funds collectively appreciated by $ 130.1 million, a whopping 31.8 percent, to the year ending June 30, 2021.

As of June 2020, the funds had a total value of $ 508.1 million. In June, they totaled $ 638.2 million.

“These are historic returns,” said Al Marciano, who chairs the Retirement City Council.

The fund’s return, which totaled $ 172,535,226 as of June 30, has exceeded benchmarks. The same is true of the other three funds managed by Fiducient: Fire and Police I, a closed fund with assets of $ 79.6 million; Police II at $ 268 million; and Fire II at $ 118 million.

Marciano, an accountant who plays a volunteer role, credits the outstanding performance of the market, fund management and committee oversight. Mayor Frank Picozzi observed that the return of 31.8% exceeded that of the state pension system with returns of 25.6% for the year.

“As mayor, a top priority is securing the future benefits of all retirees and current employees in the city while keeping costs as low as possible for our taxpayers,” Picozzi said in a statement.

City Treasurer Lynne Prodger and City Finance Director Peder Schaefer serve as police and fire planning trustees. Schaefer said the four plans are managed collectively.

The role of the Pension Board is to review plan management, target asset allocation and policy setting. As Marciano explained, investments are made in different sectors of the market, from bonds to domestic and foreign stocks to stocks of small, medium and large companies. A total of 17 separately managed accounts, depending on the investment sector, make up the portfolio.

Anthony Tranghese of Fiducient acts as financial advisor and reports to Schaefer, Prodger and the Pension Board.

Does the exceptional performance of the past year mean that the city can increase pension benefits?

For starters, Schaefer explains, the city’s actuary examines fund performance over a five-year period to determine whether the segregated funds are adequately funded to pay for the benefits set by contracts and ordinances. Taking into account the past financial year, over the past five years the average fund return is 11.4%, which exceeds the investment return of 6.9% assumed by the actuary.

“It is premature to think that we have come out of the woods and that we could cut contributions,” Schaefer said, referring to the overall level of unfunded pension liabilities, the worst being Fire & Police I. “This is no time to think about improved benefits. “

However, there will be some changes for the benefit of retirees.

Municipal retirees, Schaefer said, are expected to receive a COLA, or cost of living adjustment, because of the return on investment next year, because the current year is based on the previous year. Without going through each of the plans and orders, he could not immediately define the impact on payments of the other plans.

He pointed out that the 31.8% growth in assets across all plans represents growth in invested funds. Overall, when city and employee contributions as well as payments are calculated, funds have increased by approximately 26%.

“Our job is to manage funds and comply with orders,” Schaefer said.

So far, the investment of plan funds continues to follow the market.

According to the most recent quarterly report released in August by Fiducient, the funds reflect similar percentage appreciation rates.

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The pension fund will bring 180 employees to i9 Wed, 29 Sep 2021 12:36:25 +0000


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The West Midlands Pension Fund has become the latest organization to become a tenant in the city’s new i9 development.

This means that the Class A complex’s offices were almost fully let in just seven weeks after the building was completed.

The West Midlands Pension Fund will occupy just under 20,000 square feet on the second and third floors of the development and will be the base of 180 employees.

The other occupants of the i9 will be hundreds of staff from the Department of Leveling, Housing and Communities, including ministers and senior officials, on the ground and fourth floors, and LGPS Central Limited on the first floor.

Councilor Stephen Simkins, deputy head of Wolverhampton City Council and a member of the Cabinet responsible for the town’s economy, said: ‘Securing the West Midlands pension fund as a tenant at i9 is a huge feather in the city’s hat, supporting the city’s priorities of creating opportunity and learning. through its relight campaign.

“It also means that the five floors of office space were almost fully let a few weeks after construction of the building was completed, which is a remarkable achievement.

“He absolutely endorses the courageous and daring decision of the Council to invest and develop new Class A commercial office space in Wolverhampton.

“I10 and i9 have set the bar higher for providing top quality office space in the city and the Council is now looking for ways to grow further so that we can further expand our shopping district and create more opportunities for investors and jobs for our residents. “

The Chairman of the Pensions Committee, Councilor Milkinder Jaspal, added: “We are delighted to have chosen the I9 space to support the delivery of our services in the West Midlands. We actively support the members of our pension funds in planning for their retirement and our key priority is to help individuals plan for their retirement. i9 offers the perfect location. It is widely accessible thanks to the excellent transport networks developed in the city and has advanced digital connectivity.

“The building, which achieved the BREEAM Excellent level, was an important factor in our selection – we are committed to working with the owner and neighboring tenants to ensure we maintain the same sustainability standards that we set for our own investments. real estate. “

Ion Development Director Rob Mason said, “We are delighted to see i9 following in the footsteps of i10’s success. This is a testament to the determination of the partners involved, who have rightly placed connectivity and sustainability as being of paramount importance in a successful Class A building.

“I9 and similar developments are bringing working communities to the city center, galvanizing momentum for Wolverhampton’s regenerative story. “

i9 was born out of the successful i10 complex across Railway Drive in the city center, both delivered by council and real estate developer, Ion.

Contractor GRAHAM constructed Class A office space at i9, which includes the potential 5,600 square feet of retail space.

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PPF reveals £ 105million drop in estimated 2022/23 drawdown Tue, 28 Sep 2021 10:04:42 +0000

The Pension Protection Fund (PPF) has launched a consultation on the drawdown rules for 2022/23, with a strong funding position and stable drawdown rules resulting in a £ 105million drop in the drawdown estimate to £ 415million.

The consultation, which is open until Nov. 9, found that 82 percent of plans that pay a risk-based levy are expected to see a reduction, as the PPF’s funding position will allow the levy rules to remain stable and the sampling methodology to remain unchanged.

The consultation also confirmed that measures introduced in 2021/22 to support schemes in the context of the pandemic must remain in place, including adjusting small schemes, the lower cap on the risk-based tax and easement. Covid-19.

The reduction in the levy has been attributed to improvements in plan funding, as well as an update on how plan underfunding will be calculated, and the financial resilience of employers in the face of recent economic volatility.

The lifeboat also highlighted its strong financial position throughout the pandemic and its defensive investment strategy as being “instrumental” in its decision to allow the drawdown estimate to be lowered.

He stressed that he had “bounced back” from the reduced funding level as of March 31, 2020, explaining that while there are still “significant risks” facing the industry, its strong funding position allows it to ” wait to see the level of complaints received, rather than increasing the collection of pre-emptive levies.

PPF General Counsel and Executive Director David Taylor commented: “Despite the continued risk of employer insolvency, improving the funding positions of our taxpayers, as well as our financial strength, means that we can avoid increasing our taxes in a preventive manner and maintain the stability of our proposed levy rules.

“While we are pleased to see an overall improvement in plan funding, we are aware of the uncertainties surrounding future insolvency rates and the continued risk of claims, some of which individually could have a significant impact on our reserves.

“It is therefore essential that we continue to collect sufficient levies so that we can continue to pay our current and future members the compensation to which they are entitled. “

A small number of changes are made to the debit rules, however, including the consolidation of several debit rules that address how plans without
conventional agreement are billed and a review of its approach to derogatory scores for companies that have had a restructuring plan or other insolvency-related event.

The PPF confirmed the plans to consult on the levies earlier this month at the Pension Age Fall Conference, also confirming that the lifeboat is currently in the process of granting a loan with the Treasury. in order to pay debts on the Fraud Compensation Fund (FCF).

The PPF also previously increased the 2021/22 fraud compensation tax on pension plans to 75 pence per member, the maximum level allowed by regulation, after a court ruling clarified that occupational pension plans set up as part of a scam could claim the CLF.

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Paying retirement benefits in the event of death is complicated Mon, 27 Sep 2021 07:00:30 +0000


A recent article on Personal Finance, “Your retirement benefits are separate from your estate and not covered by a will,” received a large number of views, suggesting that this is a fact about savings in retirement funds that many people ignore. Shameer Chothia, senior consultant at Momentum Corporate Advice and Administration, quoted in the article, says it is only in exceptional circumstances that if you die while you are a member of a pension fund (and it may be an occupational pension or provident fund, a preservation fund and even your retirement pension investment), the benefit is paid to your estate.

This is because pension funds are governed by the Pension Funds Act, which is quite explicit on how benefits are to be distributed in the event of a member’s death. It applies to assets affiliated to a pension fund, who die prematurely, before reaching retirement age.

As with a life insurance policy, your retirement fund requires you to name beneficiaries on a beneficiary designation form. But – and this is a big but – it is up to the fund trustees to determine who gets what, and while they will consider your designated beneficiaries, these are not the only people they will consider when distributing, which must be “fair”. Trustees are required to consider any dependents, including people you have not nominated, such as children from a previous marriage and even illegitimate children they may be on when looking for. your loved ones and your offspring.

Let us take a look at the relevant section of the Act, section 37C:

“Notwithstanding any provision to the contrary contained in a law or in the regulations of the registered fund, any benefit (other than a benefit payable as a pension to your spouse or to your child under the rules of the registered fund …) payable on on death of the Member, will not form part of the assets of the Member’s estate, but will be dealt with as follows (and here I deviate from the exact wording of the Act for the sake of brevity):

a) If the fund, within 12 months of your death, becomes aware of or finds a dependent or dependents of the member, the benefit will be paid to that dependent or, as the fund may deem equitable, to one of these dependents. or in proportion to some or all of these dependents.

b) If the fund is not aware of or cannot find any dependent of the member within 12 months, and the member has appointed in writing an agent who is not a dependent … the benefit or [nominated] part of the benefit will be paid to the candidate.

If the member has a dependent and has also nominated a candidate, the fund will pay the benefit or a portion thereof to that dependent or candidate in such proportions as the board may deem equitable.

c) If the fund does not know or cannot find any dependents and the member has not appointed an agent, or if the member has appointed part of the service to an agent, the service (or remaining part of it) will be paid to the member’s estate.

There is another condition under (b): If there are no dependents (named or not named but found by search) and your estate is in debt, the benefit can be used to offset the debt. But that’s only if you don’t have dependents. It will apply if you have a named beneficiary who is not a dependent – in which case the named beneficiary will have whatever is left over after the debt is paid.

How is a dependent defined in the Act? The definition is quite broad:

a) Someone to whom you are legally responsible for maintenance.

b) Someone to whom you are not legally responsible for maintenance, if that person is:

i) in the opinion of the board, depending on you for maintenance;

ii) your spouse;

iii) one of your children, or an adopted child, or a child born out of wedlock.

c) someone to whom you would have become legally responsible for maintenance.

So everything is quite complicated, as you can see, and what must often be a nightmare for pension fund trustees, especially when obscure “dependents” start to come out of the woods after the death of one. member. No wonder the pension fund arbitrator receives so many complaints about the way the trustees have distributed the benefits.

One solution is to list all of your known dependents (as defined in the Act) as beneficiaries on your nomination form. This will make things much easier for the Trustees and the benefit will likely be paid as soon as possible.

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