Where did the deficit come from? – a study in scarlet (ink)

20 January 2015 According to Pension Protection Fund (PPF) data1, the s.179 funding level for the aggregate universe of DB schemes potentially eligible for entry into the PPF fell sharply during 2014. According to their database, the aggregate funding position moved from a small surplus (0.8% at Dec 13) to a significant deficit (-17.7% at Dec 14). So where did all this red ink2 come from? Well … conventional growth assets may not have helped much. Trustees will be familiar with the roll-forward phenomenon on actuarial valuations; that the selected discount rate becomes a sort of ‘hurdle rate’ going forward…

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Babies & Bathwater – Preliminary QIS results for IORP 2

11 April 2013 The European Insurance and Occupational Pensions Authority (EIOPA) has been tasked by the European Commission with establishing a new framework for the Europe-wide regulation of pension schemes – IORP 2. The most controversial aspect of their consultation work to date is the calculation of scheme solvency and how best to include a quantitative estimation of the value of sponsor support. Much media coverage has already focused on the additional costs that might need to be incurred by sponsors and speculation about how this project, if implemented badly, could serve as the final nail in the coffin of…

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