Meeting defined benefit pension obligations: measurement, risk and flight paths

2012 ◽  
Vol 18 (2) ◽  
pp. 271-307 ◽  
Author(s):  
J. Hatchett ◽  
M. Hurd ◽  
I. Clacher
Keyword(s):  
Decision Making ◽  
Flight Path ◽  
Pension Scheme ◽  
Defined Benefit ◽  
Common Basis ◽  
Path Structure ◽  
The Uk ◽  
Common Target ◽  
Over Time

AbstractThe UK defined benefit pension scheme landscape has changed dramatically over the last few decades. During this period of change, conflicting views regarding the measurement of both assets and liabilities has made communication challenging. In turn, this has led to an under appreciation of risk and often suboptimal decision making. This paper seeks to draw together a variety of contrasting views to provide a coherent framework for stakeholders to meet pension scheme obligations over time.The proposed framework encourages agreement between both scheme sponsors and trustees towards a common target through a well articulated plan or “flight path”. In addition, the proposed flight path structure provides a common basis underpinning the measurement of both pension obligations and the risks inherent in any plan to meet those obligations.

scholarly journals The cult of the equity for pension funds: should it get the boot?

2005 ◽  
Vol 4 (1) ◽  
pp. 57-85 ◽  
Author(s):  
CHARLES SUTCLIFFE
Keyword(s):  
Asset Allocation ◽  
Risk Sharing ◽  
Pension Scheme ◽  
Defined Benefit ◽  
Turn Of The Millennium ◽  
Equity Prices ◽  
Risk Return ◽  
History Of ◽  
Complete Rejection ◽  
The Uk

Over the last half century UK defined benefit pension schemes have followed the cult of the equity by investing a large proportion of their assets in equities. However, since the turn of the millennium this cult has faced two serious challenges – the halving of equity prices, and the complete rejection of equity investment by the Boots pension scheme in 2001. This paper summarises the history of the cult in the UK and the arguments advanced at the time to support its adoption. It then presents the case for the cult (excluding taxation, risk sharing and default insurance). This is followed by a detailed consideration of the validity of this case, including an examination of the relevant empirical evidence. It is concluded that, in the absence of taxation, risk sharing and default insurance, the asset allocation is indeterminate; and depends on the risk-return preferences adopted by the trustees.

scholarly journals Integrated risk management for defined benefit pension schemes: a practical guide

2017 ◽  
Vol 23 ◽  
Author(s):  
A. N. Hitchcox ◽  
C. Patel ◽  
C. J. Ramsey ◽  
E. L. Studd ◽  
L. T. Ma ◽  
...  
Keyword(s):  
Decision Making ◽  
Risk Management ◽  
Continuous Process ◽  
Working Party ◽  
Investment Strategy ◽  
Pension Scheme ◽  
Defined Benefit ◽  
Pension Schemes ◽  
Integrated Risk ◽  
Integrated Risk Management

AbstractThe Working Party has developed some practical hints and tips for those developing integrated risk management (IRM) plans for UK defined benefit pension schemes in the context of the requirements of the Pensions Regulator. Four case studies are presented to illustrate its conclusions, which are encapsulated in the ten commandments for effective IRM. IRM is the consideration of investment, funding and covenant issues, and how these interact. Its purpose should be to aid decision making and so should have a clear outcome in mind. It should be a continuous process and should form part of everyday trustee governance – it is not simply a one-off exercise. Whilst most Trustees and advisors consider funding issues when setting their investment strategy and vice versa, fewer fully integrate covenant into their decision-making process. However, covenant underpins all risk taken in a pension scheme and so needs to form a regular part of trustee discussions and analysis by advisors.

Catalysts and rationales for reporting staff sexual misconduct to UK higher education institutions

2021 ◽  
Author(s):  
Anna Bull
Keyword(s):  
Higher Education ◽  
Decision Making ◽  
Sexual Violence ◽  
Higher Education Institutions ◽  
Sexual Misconduct ◽  
Early Career ◽  
Third Party ◽  
The Uk ◽  
Different Levels ◽  
Over Time

The majority of research on reporting of sexual violence and harassment has focused on reasons why women don’t report their experiences rather than examining why they do. This article takes this discussion into the higher education setting, drawing on interviews with 16 students and early career researchers in the UK who considered or attempted to report staff sexual misconduct to their institution and analysing their motivations for doing so. The motivations are broken down into two aspects: the immediate catalysts that triggered the report or disclosure, and the deeper rationales for why interviewees made this decision. Separating catalysts and rationales for reporting in this way allows different levels of decision-making over time to become clearer. Interviewees’ catalysts for reporting included leaving their institution, needing an extension on an assignment, protecting their own physical safety, or being validated by a third party. By contrast, the main rationale that interviewees gave for trying to report staff sexual misconduct was to prevent other women being targeted. Further rationales identified were fighting injustice and reporting for academic or career-related reasons. Higher education institutions’ policies and practices in this area need to take into account these different levels of decision-making around disclosure and reporting.<br /><br />Key messages<br /><ul><li>There is much less research examining the reasons why victim-survivors do not report sexual violence and harassment than the reasons why they do report.</li><br /><li>In this study of students and staff who reported staff sexual misconduct to their university, the main rationale that interviewees gave for trying to report was to prevent other women being targeted.</li><br /><li>The article argues that separating catalysts for reporting from rationales makes visible different levels of decision-making over time.</li></ul>

Financial Management of the UK Pension Protection Fund

2013 ◽  
Vol 18 (2) ◽  
pp. 345-393 ◽  
Author(s):  
J-P. Charmaille ◽  
M.G. Clarke ◽  
J. Harding ◽  
C. Hildebrand ◽  
I.W. Mckinlay ◽  
...  
Keyword(s):  
Risk Management ◽  
Financial Management ◽  
Enterprise Risk Management ◽  
Pension Scheme ◽  
Defined Benefit ◽  
Corporate Sponsor ◽  
Stakeholder Groups ◽  
Pension Schemes ◽  
Enterprise Risk ◽  
The Uk

AbstractThe UK Pension Protection Fund (PPF) was established in April 2005 to protect the pensions of members of UK private sector defined benefit pension schemes which have insufficient assets and whose corporate sponsor fails. The Fund takes over the pension scheme assets and assumes responsibility for the payment of compensation to the former members of the scheme. The PPF is funded by a levy on the population of eligible schemes. This paper discusses the application of Enterprise Risk Management principles and techniques to the unique situation of the PPF. The elements of the financial management of the Fund have been developed by reference to practice within proprietary insurance institutions and within pension funds. The paper will be of interest and, we hope, of some value to students, researchers and analysts and also to the PPF's own stakeholder groups that have a stake in an effective pension protection regime.

scholarly journals Who wins? Evaluating the impact of UK public sector pension scheme reforms

2016 ◽  
Vol 237 ◽  
pp. R38-R46 ◽  
Author(s):  
Alexander M. Danzer ◽  
Peter Dolton ◽  
Chiara Rosazza Bondibene
Keyword(s):  
Public Sector ◽  
Local Government ◽  
Civil Service ◽  
Pension Scheme ◽  
Defined Benefit ◽  
Level Of Education ◽  
Fire Services ◽  
Pension Schemes ◽  
The Uk ◽  
The Impact

Radical changes have been implemented to pension schemes across the UK public sector from April 2015. This paper simulates how these changes will affect the lifetime pension and how the negotiated pension changes compare across six public sector schemes by level of education. Specifically, we simulate the occupation specific Defined Benefit (DB) pension wealth accumulated for a representative employee over the lifecycle by factoring in the recent changes to pension conditions. We find that less educated workers with low or moderate earnings in the NHS, Local Government and Civil Service schemes are the winners having secured an increase in the value of their pension of between 10–20 per cent. Graduate workers with faster wage growth in the Civil Service, Teachers and Local Government schemes lose between 3 per cent and 5 per cent. This is in sharp contrast with the Police and Fire services who have lost around 40 per cent irrespective of their education.

Contact in Adoption: The Experience of Adoptive Families in the USA

2003 ◽  
Vol 27 (1) ◽  
pp. 57-67 ◽  
Author(s):  
Gretchen Miller Wrobel ◽  
Harold D Grotevant ◽  
Jerica Berge ◽  
Tai Mendenhall ◽  
Ruth McRoy
Keyword(s):  
Decision Making ◽  
Longitudinal Study ◽  
Family Communication ◽  
Adoptive Families ◽  
Complex Issue ◽  
The Usa ◽  
The Uk ◽  
Changes Over Time ◽  
Over Time

Contact in adoption is a complex issue that adoption professionals frequently negotiate. Today most adoption placements include an initial plan for contact that in many instances changes over time. By understanding contact as an issue that presents itself over the course of an adopted person's lifetime, the complexities it brings to the adoption experience can be seen. Gretchen Miller Wrobel, Harold D Grotevant, Jerica Berge, Tai Mendenhall and Ruth McRoy discuss contact from a US perspective using findings from the Minnesota/Texas Adoption Project, a longitudinal study of openness in adoption. They examine how curiosity, satisfaction with adoptive contact, family communication and searching influence decision-making about the extent of contact. Implications for adoption professionals in the USA and the UK are also presented.

Pension Scheme Trustees and Regulators

2017 ◽  
Author(s):  
Christopher Mallon ◽  
Shai Y. Waisman ◽  
Ray C. Schrock
Keyword(s):  
Safety Net ◽  
Pension Plans ◽  
Pension Scheme ◽  
Defined Benefit ◽  
Substantial Role ◽  
The Us ◽  
Regulatory Bodies ◽  
The Uk ◽  
Defined Benefit Pension Plans

Superficially, the UK and the US pensions regime when companies are restructuring look similar. Both countries have a significant number of defined benefit pension plans, both have a regulatory safety net for those plans and both have active regulatory bodies to patrol that safety net that can play a substantial role in the restructuring of the sponsoring employer. Under both regimes, substantial debts can be triggered on the employers.

scholarly journals Economic capital for defined benefit pension schemes: An application to the UK Universities Superannuation Scheme

2012 ◽  
Vol 11 (4) ◽  
pp. 471-499 ◽  
Author(s):  
BRUCE T PORTEOUS ◽  
PRADIP TAPADAR ◽  
WEI YANG
Keyword(s):  
European Commission ◽  
Capital Requirements ◽  
Economic Capital ◽  
Green Paper ◽  
Pension Scheme ◽  
Defined Benefit ◽  
Pension Schemes ◽  
The Future ◽  
Regulatory Regimes ◽  
The Uk

AbstractThis article considers the amount of economic capital that defined benefit (DB) pension schemes potentially need to cover the risks they are running. A real open scheme, the Universities Superannuation Scheme, is modelled and used to illustrate our results and, as expected, economic capital requirements are large. We discuss the appropriateness of these results and what they mean for the DB pension scheme industry and their sponsors. The article is particularly pertinent following the recent European Commission Green Paper on the future of European pensions systems, its call for advice on reviewing the Institutions for Occupational Retirement Provision Directive and the introduction of the Basel 2 and Solvency 2 risk-based regulatory regimes for banking and insurance, respectively.

Managing the Conflicting Interests of Workers and Shareholders: Evidence from Pension-Assumption Manipulations

ILR Review ◽  
2018 ◽  
Vol 72 (3) ◽  
pp. 523-551 ◽  
Author(s):  
J. Adam Cobb
Keyword(s):  
Decision Making ◽  
Corporate Governance ◽  
Pension Plans ◽  
Defined Benefit ◽  
Multiple Stakeholders ◽  
Current Period ◽  
Retirement Security ◽  
Conflicting Interests ◽  
To Receive ◽  
Over Time

Whereas research on corporate governance typically attends to the conflicting interests between shareholders and executives, in practice executives must frequently adjudicate the demands of multiple stakeholders. To investigate how executives cope with the divergent interests of workers and shareholders, the author examines how much firms claim they will earn on the assets in their defined benefit (DB) pension plans. In a DB arrangement, employees forgo wages in the present in order to receive postretirement income, and they rely on executives to properly fund and manage plan assets. Executives, however, can increase the amount they expect the firm to earn on plan assets, which increases firm earnings in the current period but may undermine workers’ retirement security if expectations do not match actual returns over time. The author shows that the influence and interests of employees and shareholders as well as the decision-making schemas of the CEO affect whether executives exercise this discretion.

Sign in / Sign up

Export Citation Format

Share Document