Pension scheme funding levels and the railways: our latest insight


The latest actuarial valuations for the shared cost sections of the Railways Pension Scheme (the ‘RPS’) are being carried out as at 31 December 2016. While there has been a plethora of recent newspaper headlines lamenting an apparently astronomical increase in deficits across DB schemes in general, the RPS is – as ever – a little different.

Funding levels may therefore not be as bad as might have been feared. In this Insight we explore the approach which the Trustee and Scheme Actuary intend to take to setting assumptions, the likely impact on
deficits for different sections, and some of the options available to employers to address the valuations.

For the full insight, click here.

Standard Life and Aberdeen merger – our view



The proposed merger will create an investment business with £660 billion under administration, of which £580 billion is assets under management, making the
group the largest active asset manager in the UK.

Aberdeen shareholders will own approximately 33 per cent with Standard Life shareholders owning roughly 67 per cent of the combined group on a diluted basis.

It has been agreed that the combined group will
be headquartered in Scotland and will include, and operate under, branding drawn from both organisations.

Our view? Here.

One in four pension schemes could move to surplus from deficit using an alternative discount rate method

Our latest research report considers how most schemes set discount rates for pension scheme funding purposes.  In addition to the “gilts plus” method, it also considers two alternative methods which, in current market conditions, produce radically different results.  Using one of the alternative methods could potentially make deficits disappear.  The question is, should schemes be changing their approach and if so, what additional safeguards are necessary in light of the additional risk that adopting a lower funding target presents?

You can also see how much higher the discount rate for your scheme’s last valuation might have been had one of the two alternative models we consider in our report been used with our “discount rate quandary” calculation tool.

Fill in your details to download the report here