Gad supports NI Utility Regulator in review of NIW pension costs

The Government Actuary’s Department (Gad) has supported the Utility Regulator for Northern Ireland in the review of pension costs for Northern Ireland Water (NIW).

The government report enables the Utility Regulator to determine the pension costs allowed for during NIW’s next price control period, which will span from 1 April 2021 to 31 March 2027.

NIW operates both a defined contribution (DC) and defined benefit (DB) pension schemes, with the findings from the report allowing the Utility Regulator to decide whether it needed to adjust the pension costs requested by NIW.

The report identified a number of key considerations for the regulator, including around the level of prudence within the discount rate used in the actuarial funding valuations and the appropriateness of the basis chosen to assess the cost incurred by the sponsor in respect of future accrual.

It also highlighted considerations around the application of any future surplus arising within the scheme and whether the administrative costs incurred represent value for money, stating that expenses were "notably high" for the period of 2016-2019,

The report was published within the Utility Regulator’s consultation on a draft determination, which will close to responses on 16 December 2020.

Gad will also continued to support the Utility Regulator on the pensions aspects of responses received and the final determination, which is expected to be published on 11 March 2021.

Gad actuary and project lead, Hayley Spencer, commented: “We produced a report on the key factors which determine NIW’s pensions costs.

“Our report focussed on the benefit structures, the assumptions in the funding valuation, and the pensions costs requested by NIW in its business plan.

“We also compared the funding approach with industry practice in the UK private sector, as well as pension schemes of other regulated companies.

“These included the Northern Ireland Electricity Networks and Ofgem.”

    Share Story:

Recent Stories


Being retirement ready
Gavin Lewis, Head of UK and Ireland Institutional at BlackRock, talks to Francesca Fabrizi about the BlackRock 2024 UK Read on Retirement report, 'Ready or not. How are we feeling about retirement?’

Time for CDI
Laura Blows speaks to AXA Investment Managers (AXA IM) senior portfolio manager for fixed income, Rob Price, about cashflow-driven investing (CDI) in Pensions Age’s latest video interview

The role of CDC
In the latest Pensions Age podcast, Laura Blows speaks to TPT Retirement Solutions Chief Client Strategy Officer, Andy O’Regan, about the role of collective DC (CDC) within the UK pensions space
Keeping on track
In the latest Pensions Age podcast, Sophie Smith talks to Pensions Dashboards Programme (PDP) principal, Chris Curry, about the latest pensions dashboards developments, and the work still needed to stay on track

Advertisement