No. 170 September 2009 - Scheme Funding - The Latest Trends
This is our third Analysis of funding valuations since the scheme funding regime was introduced in 2005. It aims to inform trustees and employers of what other schemes are doing. In particular, it identifies how approaches to and the results of valuations have changed over the past three years.

Our key findings this year include:

• Discount rates for technical provisions incorporate broadly the same margins over gilt yields as previous years;
• Trustees' assessment of employer covenant is having a more discernible impact on the discount rate - trustees with concerns are adopting more prudent discount rates than those who consider the covenant to be strong;
• Basing discount rates on corporate bond yields is becoming rather less common;
• Allowances for longevity improvements continue to be increased; and
• Recovery periods are lengthening and a greater proportion exceed the Pensions Regulator's 10 years trigger.

No. 169 June 2009 - High Earners Hit by New Tax on Pensions
Significant changes to the taxation of pension savings for high earners were announced in the 2009 Budget:

• With immediate effect, a new 'special annual allowance charge' on specific pension savings is introduced;
• From 6 April 2011, additional tax will be payable on all pension savings for high earners.

Only a high level summary is provided of the proposed 6 April 2011 changes. Additional tax will apply to pension savings for those earning above £150,000 p.a. with the highest rate of tax applying to those earning above £180,000 p.a. Pension savings will include defined benefits and all contributions to defined contribution arrangements.

No. 168 March 2009 - State Pensions: No Small Change
The UK's State pension system is changing. Employees will see their earnings related benefit start to diminish, from April 2009, as we move to a flat rate benefit. This will be relevant to employers when reviewing the level of future pensions for employees or deciding whether such a review is necessary.

The impact of the changes will depend on an employee's earnings level.

Over time, State Additional Pension (SAP) levels are expected (in 2008 earnings terms) to:

• Triple at earnings of £10,000 per year;
• Remain stable at £20,000; and
• Be cut in half at £40,000.

Despite this, National Insurance contributions will remain earnings related.

Other aspects on UK pension provision such as the Pension Credit and the impending Personal Accounts regime are targeted at lower earners. It is therefore particularly important for individuals earning above £20,000 to ensure they are making sufficient further pension provision.

No. 167 January 2009 - Updated Myners Principles and the Implications for Scheme Governance
In October 2008, the Treasury published its response to a consultation on the Myners principles, which came into effect in 2002.

We are supportive of the Treasury’s proposals and agree that the Myners principles needed updating to ensure that they continue to be relevant.

The economic and investment backdrop has changed markedly since their inception. UK pension scheme trustees are being faced with more and more complex investment related decisions and the range of options available to them continues to multiply. This also means that governance issues have increased in importance and we believe it is right that the principles should be updated to reflect this.