New Actuarial Assumptions Boost UK Pension Funded Levels

The aggregate funding position of the 5,450 corporate pension plans tracked by the UK’s Pension Protection Fund’s PPF 7800 Index rose to 100.9% in November from 95.9% at the end of October, with new actuarial assumptions boosting the pensions’ funding level beyond fully funded.

The PPF reported that the funds improved to an estimated surplus of £14.3 billion at the end of November from a deficit of £67.2 billion at the end of October. Total assets were £1.58 trillion, while total liabilities were £1.57 trillion. Total pension assets fell 0.5% during the month, but increased by 1.1% over the year, while total liabilities fell 5.4% for the month, and 5.2% from the same month last year.

The number of plans in deficit decreased to 3,008 at the end of November from 3,420 at the end of October, and now represent 55.2% of the total defined benefit plans tracked by PPF. Meanwhile, the number of plans in surplus increased to 2,442 at the end of November, representing 44.8% of plans, from 2,030 at the end of October (37.2%), and 1,925 plans in surplus at the end of November 2017 (34.4%).

The aggregate deficit of all plans in deficit fell to £137.6 billion at the end of November from £184.8 billion at the end of October, and from £197 billion at the end of November 2017. Meanwhile, the total surplus of plans in surplus rose to £151.9 billion at the end of November, from £117.6 billion at the end of October, and from £109.4 billion at the same time last year.

Want the latest institutional investment industry news and insights? Sign up for CIO newsletters. 

The PPF also said it moved to a new dataset that is based on a more up-to-date universe of pension plans, which excludes plans that have entered PPF assessment, for example, and uses more recent funding information from the plans.

It said the change increased the funding level at the end of October by 2.3 percentage points and improved the aggregate funding position by £40.5 billion. And for the figures for the end of November, the new dataset accounts for a new version of the actuarial assumptions for s179 valuations, which increased the funding level by 5.1 percentage points.

Without the new actuarial assumptions, the funding level for November would have been 95.8%, a decrease of 0.1 percentage points over the month as an increase in gilt yields led to decreases in liability values. Equity markets and gilt yields are the main drivers of funding levels.

A federal court has ordered two former executives behind an allegedly fraudulent initial coin offering (ICO) to pay nearly $2.7 million and prohibited them from serving as officers or directors of public companies, or participating in future offerings of digital securities.

Jared Rice Sr., former CEO of Dallas-based AriseBank, which claimed to be the world’s first “decentralized bank,” and former Chief Operating Officer Stanley Ford were accused of offering and selling unregistered investments.

“Rice and Ford lied to AriseBank’s investors by pitching the company as a first-of-its kind decentralized bank offering its own cryptocurrency for customer products and services,” Shamoil Shipchandler, director of the SEC’s Fort Worth Regional Office, said in a release. “The officer-and-director bar and digital securities offering bar will prevent Rice and Ford from engaging in another cryptoasset-based fraud.”

According to the SEC charges, AriseBank used social media, a celebrity endorsement, and other dissemination tactics to raise what it claimed to be $600 million of its $1 billion goal in just two months.

Want the latest institutional investment industry news and insights? Sign up for CIO newsletters. 

Rice and Ford allegedly offered and sold unregistered investments in their purported “AriseCoin” cryptocurrency by offering a various banking products and services using more than 700 different virtual currencies. The SEC said AriseBank’s sales pitch claimed that it developed an algorithmic trading application that automatically trades in multiple cryptocurrencies.

The SEC also accused the company of falsely stating that it purchased an FDIC-insured bank, which allowed it to offer customers FDIC-insured accounts, and the ability to obtain an AriseBank-branded Visa credit card to spend any of the cryptocurrencies. AriseBank also allegedly omitted to disclose the criminal background of key executives.

To settle the charges, Rice and Ford agreed to be held jointly liable for more than $2.2 million in disgorgement, more than $68,000 in prejudgment interest, and each must pay a penalty of nearly $185,000. They also agreed to lifetime bans from serving as officers and directors of public companies, and from participating in digital securities offerings.

Although Rice and Ford agreed to the settlements, they did so without admitting or denying the allegations in the SEC’s complaint.

Tags: AriseBank, Cryptocurrency, Jared Rice Sr., SEC