23 June 2023
The Institute and Faculty of Actuaries (IFoA) has responded to the Parliamentary committee report on ‘Defined benefit pensions with Liability Driven Investments’.
Commenting on the report, IFoA President Matt Saker, said:
“We welcome this important report by the Work and Pensions Committee on ‘Defined benefit pensions with Liability Driven Investments’ following the events of September 2022 and its subsequent implications. The report captures the lessons of the crisis and sets out the remedies in governance and other measures which are already, or soon to be in place, including improved data and guidance.”
IFoA Pensions Board Chair Leah Evans gave evidence to the Committee Inquiry in person in November 2022 and again this week (21 June 2023), urging against knee jerk reactions and recommending an approach targeting the cause of the problem, such as further guidance on leverage.
Matt Saker continued: “We are pleased the evidence we provided in oral and written evidence was both useful to, and highlighted by, the Committee in its report, but recognise the Committee’s challenge that “there is still work to be done”, including the introduction of longer term solutions to support the recommendations. The actuarial profession is committed to ensuring we play our part in supporting the reforms needed in the wake of the LDI crisis.
“As we highlighted in our response to the Committee’s live inquiry on Defined Benefit (DB) schemes yesterday, there is an important read-across to the current discussion on scheme funding rules for DB pensions, in particular to ensure that the proposed funding rules are amended to allow genuinely open schemes to be exempt from some of the requirements introduced by the proposed new funding and investment regulations. In addition, it is important that both the Department for Work and Pensions (DWP) and the Pensions Regulator (TPR) work together to ensure consistency between the regulations and the funding code. With the funding code delayed until 2024, there is now an opportunity to look again at the proposals with the Committee’s recommendations in mind. We are happy to engage in discussions with DWP and TPR on this issue.”
~ENDS~
Sonia Sequeira, Media Relations Manager, IFoA
Tel: 07525 592 198
Email: sonia.sequeira@actuaries.org.uk
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