LawDeb Pension Trustees - Life after voting for Brexit

08 July 2016

Law Debenture organised a discussion at short notice for trustees and executives of schemes with which we work on 6th July.

A comprehensive discussion took place focusing on the implications of the Brexit vote on pension schemes and their funding. The general agreement was that while there may be no immediate requirement for action, the position should be monitored closely.

Pension schemes differ in their exposure to UK and overseas investments, interest rates and foreign exchange rates, hence the impact on funding will vary significantly across these funds. Similarly, for defined benefit schemes, the impact on the strength of employer covenant will depend on a number of company specific factors including the extent of non-UK operations and revenues that are not exposed to the UK economy. The specific actions that trustees should take will therefore vary from scheme to scheme but are likely to include increased monitoring of investments, funding and covenant, with appropriate support from advisers.

Law Debenture has prepared a note summarising potential implications and actions in more detail and a copy can be found here.

Mark Ashworth, Chairman of LawDeb Pension Trustees, commented:

The discussion confirmed the significance of the Brexit vote for pension schemes, and the extent of the associated uncertainty. The most important action for trustees is to think and discuss, and to be prepared to take considered actions but not just to conclude that “something must be done”.

LawDeb Pension Trustees will continue to share its thinking with, and to encourage discussion amongst the schemes with which it works.

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