We turned 10 in 2018! We look ahead to possible developments in the next decade…
This year we turned 10! And to celebrate reaching our 10 year milestone, we decided to produce a short film.
A decade of seeking to deliver safer financial futures inspired us to reflect on how much the pensions industry has changed over that time; and how much we’ve achieved. It also seemed to be the right moment to look 10 years ahead at what the future may hold for our industry.
In our short film (just over two minutes), some of our team share their thoughts on the next decade.
Transcript of film below:
What changes do you think will be made to DB pensions policy, legislation, or regulation over the next 10 years?
Darren Redmayne, CEO: I think we are going to see covenant feature more and more in regulation alongside investment and actuarial consulting.
Emily Goodridge, Director: DB policy will oscillate as policy makers look for the right balance between protecting members’ benefits and not stifling corporate activity.
Alex Hutton-Mills, Managing Director: I think that fundamentally we need some flexibility in the system either through policy or through private market solutions to deal with and make sure we can get the best outcomes for those stressed schemes.
How will the covenant industry be different in 10 years’ time?
Richard Farr, Managing Director: I can see a lot more happening in the next ten years, bigger players, more focused work, more specialists coming through as well.
Oliver Aspey, Associate Director: I think the composition of trustee boards is going to change with independent trustees becoming more of a mandatory requirement.
Alex Hutton-Mills, Managing Director: In ten years most schemes will be closer to their cashflow humps, so fundamentally that will mean there should be more focus on affordability because you’ll need to make that you can pay those benefits as they fall due, but also there’s likely to be more of a need for options of views around how to either use cash or non-cash solutions to try and reduce and eliminate pensions deficits.
What impact will changes in technology have on how DB pension schemes are managed?
Hamish Reeves, Director: I think trustee reporting tools should aid much faster decision making by trustees rather than waiting every three years at triennial valuations to make big decisions about schemes.
Richard Farr, Managing Director: Fin technology will help us to model scenarios and test models to help us assess longer term risk.
Alex Hutton-Mills, Managing Director: Technology will allow trustees to monitor scheme funding performance in real time which should speed up decision making.
Final comment from Darren Redmayne, CEO:
So a pension is only as good as the business or thing standing behind it and amazingly we’ve only really been looking at that risk for about ten years so it gives us immense pride that we’re helping our clients really understand that issue.
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