Letter to Chair of Trustees
Dear Chair,
I am a member of the XXX pension scheme – now closed to new entrants and future accrual on cost grounds. I know that:
I appreciate that you will want to ensure costs to the sponsor; any risks to accrued benefits and current employee benefits are also considered. Given the strong ESG enthusiasm of the sponsor and many of the scheme members like myself look forward to hearing about the progress you have been able to make in considering the continuing and expanded use of discretions to benefit all stakeholders.
Letter to Chair of the Board
Dear Chair,
I have read with great interest about the progress of the Group and your personal commitment as well as that of the Board executive to the Group’s ESG strategies.
I am a member of the Group's pension scheme. With the strong support of the Group, recent market changes and with reduced life expectancies, it is now well funded. Fear of runaway costs that led to its closure to new members and accrual have receded.
I know the Government is enthusiastic for investment in “productive assets” by pension schemes and on alternatives to the bulk transfer of liabilities to the overheated life insurance market. Further, I realise that existing legislation and regulation already allows trustees and sponsors to agree on ways to utilise surpluses and that discretion will become still more straightforward to exercise following the current DWP consultation and subsequent legislation.
Against that background I do hope that the Group is actively discussing a new pension investment and funding strategy to meet all stakeholders interests – something incoming regulations require.
The new agreement can plan to make discretionary payments now. The much reduced life expectancies already seen are a windfall gain for the scheme - just as inflation running well ahead of 5% maxima was a benefit to the scheme in real terms. Those factors apart of the interest rate increases should provide you with ample scope to make discretionary payments. Once a “run on” approach is adopted there is the time to ensure sustainable surpluses arise. The sponsor remains with, perhaps, backup guarantees in the unlikely event it fails or has to make additional contributions.
I have also written to the Chair of trustees making these points. I have great confidence you will together be able to produce a package which effectively addresses the needs of all stakeholders - past and present employees and the company as it develops its business further.
I see the pension scheme plan as a litmus test and an opportunity to highlight the real nature of the Group's ESG thinking.
Dear Chair,
I am a member of the XXX pension scheme – now closed to new entrants and future accrual on cost grounds. I know that:
- XXX Group is a strong, well financed business.
- The derisking steps taken by the trustees over many years and the sponsor’s cash contributions mean the scheme has a sound position.
- The latest financial information available on the scheme shows surpluses are arising on accounting and actuarial bases.
- Government is keen to see pension schemes run on and to invest in productive assets with a UK focus. So am I.
- Consultations are underway, instigated by HM Treasury / DWP, about how to make surplus funds available to assist past and present employees as well as the sponsor. Some actuarial consultants are becoming enthusiastic.
I appreciate that you will want to ensure costs to the sponsor; any risks to accrued benefits and current employee benefits are also considered. Given the strong ESG enthusiasm of the sponsor and many of the scheme members like myself look forward to hearing about the progress you have been able to make in considering the continuing and expanded use of discretions to benefit all stakeholders.
Letter to Chair of the Board
Dear Chair,
I have read with great interest about the progress of the Group and your personal commitment as well as that of the Board executive to the Group’s ESG strategies.
I am a member of the Group's pension scheme. With the strong support of the Group, recent market changes and with reduced life expectancies, it is now well funded. Fear of runaway costs that led to its closure to new members and accrual have receded.
I know the Government is enthusiastic for investment in “productive assets” by pension schemes and on alternatives to the bulk transfer of liabilities to the overheated life insurance market. Further, I realise that existing legislation and regulation already allows trustees and sponsors to agree on ways to utilise surpluses and that discretion will become still more straightforward to exercise following the current DWP consultation and subsequent legislation.
Against that background I do hope that the Group is actively discussing a new pension investment and funding strategy to meet all stakeholders interests – something incoming regulations require.
The new agreement can plan to make discretionary payments now. The much reduced life expectancies already seen are a windfall gain for the scheme - just as inflation running well ahead of 5% maxima was a benefit to the scheme in real terms. Those factors apart of the interest rate increases should provide you with ample scope to make discretionary payments. Once a “run on” approach is adopted there is the time to ensure sustainable surpluses arise. The sponsor remains with, perhaps, backup guarantees in the unlikely event it fails or has to make additional contributions.
I have also written to the Chair of trustees making these points. I have great confidence you will together be able to produce a package which effectively addresses the needs of all stakeholders - past and present employees and the company as it develops its business further.
I see the pension scheme plan as a litmus test and an opportunity to highlight the real nature of the Group's ESG thinking.