Home > News > Newsmakers > UK Defined Contribution Funds Rose 21% in 2017
Newsmakers

UK Defined Contribution Funds Rose 21% in 2017

Total assets of all plans grew to £48 billion.

By Michael Katz

UK defined contribution (DC) pension plans grew by £5.4 billion ($7.64 billion) to £48 billion in 2017, a 21% increase from the previous year, according to a new report released by The Pensions Regulator (TPR). 

“The success of automatic enrollment has put DC schemes—and particularly master trusts—at the heart of pension saving in the UK, and our figures illustrate this trend,” said Anthony Raymond, head of regulatory policy, analysis, and advice at TPR, in a release. “For these new and existing savers, we have a role to protect their benefits and so we are working hard to drive up standards of trusteeship.”

Raymond said TPR is implementing the Pension Schemes Act 2017, which requires master trusts to meet a clear set of standards in order to obtain authorization to operate.

TPR’s annual DC trust report found that 90% of people currently saving into a private sector pension are doing so through a DC plan. Additionally, memberships are up 29% from the year before to 12.6 million people, and are up by more than 400% since 2010. Master trusts make up a majority of the increase, and account for 10 million DC savers, up from 270,000 at the start of 2012.

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The report also found that while membership and total asset value are on the rise, the number of DC plans continues to decline. TPR said that the number of plans, not including micro or self-administered ones, has more than halved since 2010. to 2,180 from 4,560.

“We welcome the continued reduction in numbers of DC schemes,” said Raymond. “We have been concerned about a tail of sub-standard schemes and have been encouraging trustees who cannot or will not meet the standards we expect to consider consolidation.”

Other key findings of the DC trust report include:

  • The average asset per membership has declined to £3,900 in 2017 from £4,700 in 2016 due to an increase in the number of first-time pensions savers.
  • 51% of plans use a default investment strategy.
  • 61% of all private sector workplace pension members are in DC plans.
  • 90% of all those currently saving are investing into DC plans.
  • The total amount transferred out of DC plans has increased by 34% in the past year to £1.7 billion from £1.3 billion.

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Home > News > Newsmakers > SEC Stunts MetLife Q4 Earnings Report Due to Missing Pension Fallout
Newsmakers

SEC Stunts MetLife Q4 Earnings Report Due to Missing Pension Fallout

Insurer links pension predicament to ‘material weakness in internal control and financial reporting.’

By Chris Butera

Due to an investigation concerning some tens of thousands of insurance payments and inquiry filed by the Security and Exchange Commission (SEC), insurance provider MetLife has moved the release its 2017 Q4 earnings, delaying the announcement several weeks.

In December, the insurance giant—which handles the retirement services of 600,000 people—reported that it was locating approximately 30,000 retirees owed $150 or less per month in annuity benefits. Days later, New York and Massachusetts regulators began cracking down on MetLife to uncover more information as well as make sure the benefits are not only found, but paid.

One of the main issues MetLife is facing is finding those who have either changed jobs or relocated. In its December Investor Outlook call, MetLife said it was “undertaking a review of practices and procedures used to estimate its reserves” for the missing annuitants.

MetLife management attributed the snafu to a “material weakness in internal control over financial reporting.”

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“In connection with MetLife’s review and enhancement of the processes and procedures relating to its Retirement and Income Solutions business in the United States, MetLife is currently reviewing its processes and procedures for identifying unresponsive and missing international group annuity annuitants and pension beneficiaries,” the company said in a statement. “In addition, MetLife recently initiated an ongoing global review of its processes and procedures for identifying unresponsive and missing policyholders and beneficiaries for the other insurance and annuity products it offers. MetLife is not currently aware of any material deficiencies in its identification of unresponsive or missing annuitants, policyholders or beneficiaries with respect to such products under review.”

Although the company expects to increase its financial reserves by as much as $575 million and would take a pre-tax hit, MetLife has postponed the official reveal, from later this week to February 13. CNN Money reports that MetLife shares dropped 8% hours after the Monday announcement.

“MetLife had previously informed its primary state regulator, the New York Department of Financial Services, about this matter and is responding to questions from them and other state regulators. The US Securities and Exchange Commission enforcement staff has also made an inquiry regarding this matter and MetLife is responding to its questions. To date, MetLife is not aware of any intentional wrongdoing in connection with this matter,” the company said.

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