This document summarizes a guide for finance directors on pensions. It discusses how defined benefit pension schemes are an increasingly important issue for companies. It looks at essentials of defined benefit schemes, current issues facing finance directors like the impact of Brexit and changes to the Pension Protection Fund levy, and results of a survey of pension managers. Key findings of the survey were that 18% of defined benefit scheme members changed retirement strategies, 73% can now take auxiliary pension pots as lump sums, and around 1/3 of schemes have seen increased requests for pension transfer valuations.

1. Finance Directors' Guide to Pensions
Pensions have become an increasingly important and complicated area for companies that have a
defined benefit pension scheme.
This guide looks at:
DB Scheme Essentials
Current Issues facing FDs
2016 Pension Manager Survey Results

3. Occupational pension schemes take a variety of forms
although they broadly fall into two categories, namely
defined benefit (DB) and defined contribution (DC)
https://www.barnett-waddingham.co.uk/finance-directors-guide-pensions/rules-and-regulations/
DB / OCCUPATIONAL SCHEME ESSENTIALS
What is a DB scheme?

4. Occupational pension schemes take a variety of forms
although they broadly fall into two categories, namely
defined benefit (DB) and defined contribution (DC)
https://www.barnett-waddingham.co.uk/finance-directors-guide-pensions/rules-and-regulations/
DB / OCCUPATIONAL SCHEME ESSENTIALS
What is a DB scheme?
A wealth of legislation applies to occupational pension
schemes

5. Occupational pension schemes take a variety of forms
although they broadly fall into two categories, namely
defined benefit (DB) and defined contribution (DC)
https://www.barnett-waddingham.co.uk/finance-directors-guide-pensions/rules-and-regulations/
DB / OCCUPATIONAL SCHEME ESSENTIALS
What is a DB scheme?
A wealth of legislation applies to occupational pension
schemes
DB schemes are set up under trust which ensures that they
are eligible to receive certain tax concessions from the UK
Government.

6. https://www.barnett-waddingham.co.uk/finance-directors-guide-pensions/scheme-funding/
DB / OCCUPATIONAL SCHEME ESSENTIALS
What is a DB scheme?

7. Pension Trustees are also required to undertake and
maintain a certain level of training (commonly referred to as
Trustee Knowledge and Understanding)
https://www.barnett-waddingham.co.uk/finance-directors-guide-pensions/rules-and-regulations/
DB / OCCUPATIONAL SCHEME ESSENTIALS
What is a DB scheme?

8. Pension Trustees are also required to undertake and
maintain a certain level of training (commonly referred to as
Trustee Knowledge and Understanding)
https://www.barnett-waddingham.co.uk/finance-directors-guide-pensions/rules-and-regulations/
DB / OCCUPATIONAL SCHEME ESSENTIALS
What is a DB scheme?
The Pensions Regulator (the Regulator) is the UK regulator
for all pension schemes made available to employees

9. Pension Trustees are also required to undertake and
maintain a certain level of training (commonly referred to as
Trustee Knowledge and Understanding)
https://www.barnett-waddingham.co.uk/finance-directors-guide-pensions/rules-and-regulations/
DB / OCCUPATIONAL SCHEME ESSENTIALS
What is a DB scheme?
The Pensions Regulator (the Regulator) is the UK regulator
for all pension schemes made available to employees
“More than a third of defined benefit schemes have
recovery plans that exceed the ten-year limit set out in
guidance from the regulator”

11. CURRENT ISSUES
"What are the topics we would be
considering if we were the Finance
Director of a company with a defined
benefit scheme?"
https://www.barnett-waddingham.co.uk/finance-directors-guide-pensions/

12. CURRENT ISSUES
https://www.barnett-waddingham.co.uk/comment-insight/blog/2016/06/27/uk-votes-leave-how-pension-schemes-can-cope-uncert/
The longer-term impact of Brexit on pension schemes
has yet to be seen

13. CURRENT ISSUES
https://www.barnett-waddingham.co.uk/comment-insight/blog/2016/06/27/uk-votes-leave-how-pension-schemes-can-cope-uncert/
The longer-term impact of Brexit on pension schemes
has yet to be seen
Companies will also have a role to play in helping
trustees understand the impact of 'Brexit' on the
business

14. CURRENT ISSUES
https://www.barnett-waddingham.co.uk/comment-insight/blog/2016/06/27/uk-votes-leave-how-pension-schemes-can-cope-uncert/
The longer-term impact of Brexit on pension schemes
has yet to be seen
Companies will also have a role to play in helping
trustees understand the impact of 'Brexit' on the
business
Trustees and employers should seek to understand the
risks associated with the UK leaving the EU

15. CURRENT ISSUES
https://www.barnett-waddingham.co.uk/comment-insight/blog/2016/09/14/ppf-levy-third-triennium-proposals/
The PPF is once again considering the use of credit
ratings to determine the insolvency risk for larger
employers

16. CURRENT ISSUES
https://www.barnett-waddingham.co.uk/comment-insight/blog/2016/09/14/ppf-levy-third-triennium-proposals/
The PPF is once again considering the use of credit
ratings to determine the insolvency risk for larger
employers
Large employers, regulated financial services entities
and not-for-profit organisations could see material
changes to their PPF levies

17. CURRENT ISSUES
https://www.barnett-waddingham.co.uk/comment-insight/research/2015/12/17/pensions-flexibilities-and-db-schemes/
The PPF is once again considering the use of credit
ratings to determine the insolvency risk for larger
employers
Large employers, regulated financial services entities
and not-for-profit organisations could see material
changes to their PPF levies
The government introduced a range of legislative
changes designed to increase the flexibility that
individuals have when accessing their pension savings

18. CURRENT ISSUES
"We expect uncertainty and
volatility will dominate the
coming months and years.”
https://www.barnett-waddingham.co.uk/finance-directors-guide-pensions/

20. https://www.barnett-waddingham.co.uk/finance-directors-guide-pensions/keeping-date/hot-topics/
PENSION MANAGER SURVEY RESULTS
Pensions' issues that would currently
be top of our agenda if we were the FD
of a company with a DB scheme

21. • 18% of DB scheme members have made changes to any existing
lifestyle strategy
https://www.barnett-waddingham.co.uk/comment-insight/research/2015/12/17/pensions-flexibilities-and-db-schemes/
PENSION MANAGER SURVEY RESULTS
DB Pension Manager Survey:

22. • 18% of DB scheme members have made changes to any existing
lifestyle strategy
https://www.barnett-waddingham.co.uk/comment-insight/research/2015/12/17/pensions-flexibilities-and-db-schemes/
PENSION MANAGER SURVEY RESULTS
DB Pension Manager Survey:
• 73% of DB scheme members can now take all of their AVC pot as a
lump sum

23. • 18% of DB scheme members have made changes to any existing
lifestyle strategy
https://www.barnett-waddingham.co.uk/comment-insight/research/2015/12/17/pensions-flexibilities-and-db-schemes/
PENSION MANAGER SURVEY RESULTS
DB Pension Manager Survey:
• 73% of DB scheme members can now take all of their AVC pot as a
lump sum
• Around 1/3 of DB schemes have seen an increase in transfer
valuation quotation requests

24. • 18% of DB scheme members have made changes to any existing
lifestyle strategy
https://www.barnett-waddingham.co.uk/comment-insight/research/2015/12/17/pensions-flexibilities-and-db-schemes/
PENSION MANAGER SURVEY RESULTS
DB Pension Manager Survey:
• 73% of DB scheme members can now take all of their AVC pot as a
lump sum
• Around 1/3 of DB schemes have seen an increase in transfer
valuation quotation requests
• 70% of DB schemes surveyed do not currently allow any partial
transfer of defined benefits

25. • 18% of DB scheme members have made changes to any existing
lifestyle strategy
https://www.barnett-waddingham.co.uk/comment-insight/research/2015/12/17/pensions-flexibilities-and-db-schemes/
PENSION MANAGER SURVEY RESULTS
DB Pension Manager Survey:
• 73% of DB scheme members can now take all of their AVC pot as a
lump sum
• Around 1/3 of DB schemes have seen an increase in transfer
valuation quotation requests
• 70% of DB schemes surveyed do not currently allow any partial
transfer of defined benefits
• Over 85% of DB schemes already offer trivial commutation

26. Finance Directors’ Guide to Pensions
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