Message from Quantum Advisory at the Community Housing Cymru Virtual Finance Conference
Leading independent pension expert Quantum Advisory has addressed attendees at the Community Housing Cymru (CMC) Virtual Finance Conference about the implications for housing associations resulting from the 2020 Social Housing Pension Scheme (SHPS) valuation results. Actuaries Stuart Price and Adam Cottrell spoke candidly during the Pensions Update workshop about the net increase in contribution rates for SHPS members and the possible implications in the future.
The CMC Virtual Finance Conference was held over two days (7-8 October) and covered a host of topics currently affecting housing associations including the repercussions of the pandemic. Alongside Quantum Advisory, speakers included former footballer Fabrice Muamba and representatives from the Welsh Government, BBC Wales and #Housing2030.
Quantum Advisory spoke to delegates about issues surrounding the SHPS 30 September 2020 valuation results which, although showed a positive investment performance of assets and increasing deficit contributions from employers, also highlighted the limited growth potential due to de-risked investments and hedging protection.
The employee benefit specialists also looked to the future of such schemes and the increasing costs. Stuart Price said:
“The 2020 valuation shows a 50% increase in contribution rates for future service which might simply make it unaffordable for many employees. Employers have a few options going forward. They can either share the increase with employees, change the defined benefit sections offered to employees or decide to close the defined benefit scheme altogether. No real easy decisions for employers and it will be interesting to see what they decide to do.”