[longequityreturns] [smoothing_consultations]

During  the early part of 2013, the UK Government consulted over whether  smoothing of assets and liabilities should be disallowed (as has been  the case for several years), permitted, or made mandatory. The response  was, to my mind, amazingly, adverse and, in some cases, misinformed. Two particular canards were that those promoting smoothing were promising  lower costs and evading bad news. In fact, smoothing can increase costs  in the short term and the argument was really about what is appropriate  for the long-term. In the end, smoothing continued to be banned, which  is a real shame.

In 2017, DWP launched a green paper entitled “Security and  Sustainability in Defined Benefit Pension Schemes”, with responses due  in by 14 May 2017. Presented entirely personally, I submitted my views  on the last day.

Then, in 2020, TPR held a consultation about funding DB pension schemes. In my view, their approach was horrific, essentially designed to bankrupt plan sponsors and enrich insurance companies, which I accept may not have been intentional. My submission is here.

More recently, in July 2023, we have had the Mansion House speech but there has been little perceptible action since then.