January 2012 | PensionsWorld

Analysis

POLITICAL STAGE Sharing the pain

Could free TV licences and free bus passes be axed for millionaires? Ceri Jones, financial journalists reports

Deputy Prime Minister Nick Clegg believes that means testing benefits such as free bus passes and TV licences, currently given to pensioners solely on the basis of their age, could be a politically palatable saving. The Liberal Democrat leader told...

POINTS OF LAW Season of excess

Our legislators have been overindulging in regulation again says Robin Ellison, Pinsent Masons

The whole point of a winter festival is to overdo it. Certainly in the northern climes, the grey skies and short days make it almost imperative to eat too much and drink too much. It is too cold and wet to work on the farm and we all need something...

PENSION PREDICTIONS 2012 On your marks

Will 2012 see an Olympic leap forward in pensions provision? Editor, Stephanie Hawthorne asks the great and the good for their predictions

Threats and opportunities John Ball, head of DB pensions consulting at Towers Watson Between July and November 2011, there were five occasions when FTSE 100 companies’ combined pension deficits changed by £20bn or more in less than a...

INVESTMENT BRIEF Making ends meet

As the Chancellor saves £60bn by raising the retirement age earlier, pension providers are lagging behind, says Anthony Hilton, Evening Standard

The most telling figure in the Autumn Statement delivered by Chancellor George Osborne in November was that extending the virtual wage freeze on public sector workers is projected to save about £1bn. But government will save £60bn by...

Book reviews

100 trips to the moon

Slow Finance by Gervais Williams, £20, ISBN 978 1 4081 5163 1 (183 pages) www.bloomsbury.com

Do you know that a quadrillion exists? It is a thousand trillion – yet this unimaginable sum represents the scale of outstanding commitments of over the counter swap contracts made between financial institutions worldwide. The orientation of...

Securing an income

The Search for Income by Maike Currie, £18.99, ISBN 978 0857190345 (332 pages) www.harriman-house.com

The search for income is not new. It is as old as the history of money and money’s older counterpart, credit, says personal finance journalist, Maike Currie, in this fascinating work for private investors. It begins by explaining the concepts...

Back to school

Financial Literacy edited by Olivia S Mitchell and Annamaria Lusardi, £45, ISBN 978 0 19 969681-9 (304 pages) www.oup.com

With the rise and rise of defined contribution, increasingly employer judgments regarding how much and where to save have been replaced by employees having to make these decisions on their own. Experts in this scholarly work from the Pensions...

Comments

Leap forward

The new NAPF chairman, Mark Hyde Harrison, looks ahead

Since I became chairman of the National Association of Pensions Funds (NAPF) in late October, pensions have never been out of the news: whether it be the proposed amendments to public sector pensions and the consequent industrial action, the impact...

DC focus

DC FOCUS Taking sides

Which camp are you in when it comes to active member discounts? asks Steve Watson, Alexander Forbes

In the ongoing debate centred on the concept of active member discounts (AMD), there are two distinct camps which have emerged from the conflict: those for and those against. The voices of those who favour the latter are certainly getting louder,...

DC FOCUS The benefits of age

David Blake and Douglas Wright, Pensions Institute, Cass Business School, on optimal investing

The purpose of any pension plan is to allow spending power to be redistributed from the plan member’s working life to retirement in a manner that is consistent with the member’s personal preferences and in a way that guarantees that this...

Debrief

DC FOCUS DEBRIEF Enough's enough

What is an"adequate" pension? asks Amy Bell

With auto-enrolment, the majority of (private sector) workers will become members of a defined contribution (DC) plan. As employers prepare for auto-enrolment, many are considering what type of plan design to use. The number of new savers to...

Diary

CONFERENCE DIARY – January 2012

17 Jan Trustee conference, Glasgow www.napf.co.uk 1 Feb Implementing New Workplace Pension Arrangements in 2012, London alexandra.kelly@publicpolicyexchange.co.uk 9 Feb Blake Lapthorn’s 2012 Southern Pensions Conference, Eastleigh...

Events

COURSES AND SEMINARS – January 2012

Auto-enrolment breakfast briefing www.lcp.uk.com 6 Mar (London) Duties and responsibilities (DB) www.lcp.uk.com 21 Mar (London) Duties and responsibilities (DB) www.lcp.ck.com 17 Oct (London) Fundamentals of fund management email1@iff-...

Features

NEST Nest for all and all for Nest

Offering Nest as another pension option means we could all be in it together suggests Stephen Budge, KPMG

With less than a year away to the onset of the auto-enrolment duties, employers are taking the opportunity to review their pension provision. While the majority of larger employers will want to offer their own arrangement to their employees, maybe...

NEST Signing up

The first employers have joined our scheme, says Tim Jones, Nest

Almost 100 employers have so far signed up to use Nest ahead of the introduction of employer duties in 2012. Videos of the early experiences of three firms – F2 Chemicals based in Preston, Metal Assemblies, based in West Bromwich, and Positive...

COMMUNICATIONS Squirrelling away

How best to encourage the savings habit? Hannah Clarke, Ferrier Pearce, reports.

There is a problem at the heart of the pensions industry. It is a perennial problem, much discussed and pondered over, but still it remains. 2012 brings it out of the closed pensions world and puts it on the agenda of employers of all sizes. And the...

MASTER TRUSTS Driving down costs

Joanne Segars, chief executive, the National Association of Pension Funds, answers questions from Stephanie Hawthorne, editor, Pensions World

What is a Master Trust? A Master Trust is where a product provider, normally an insurance company, manages a pension scheme for a number of employers under a single trust arrangement. What are the advantages of a Master Trust?...

PUBLIC SECTOR PENSIONS Seeking a just solution

Public sector employees are being asked to work longer and pay more for their pensions. Deborah Cooper, Mercer, looks at the arguments

Until recently, pension provision has been a virtually invisible part of employees’ remuneration packages, viewed as something employers must provide to pass a “good employer” test, rather than as a valued benefit. Now, following...

COUNTDOWN TO 2012 Phasing in

Andrew Cheseldine, Lane Clark & Peacock, explains the scheduling of the minimum rates of contributions to a defined contribution scheme

In last month’s article, we looked at the minimum quality requirements which pension schemes must meet to fulfill the auto-enrolment requirements, including the minimum rates of contributions that must be paid to a defined contribution (DC)...

DEFICIT FUNDING Whisky galore

Employers struggling to finance their pension scheme could use asset backed funding structures, suggests David Fairs, KPMG

Property, whisky and trademarks have all been used in asset backed funding structures (ABF structures) and the number put in place has significantly increased in the past 12 months. With volatile stock markets, depressed bond and gilt yields and...

DEFAULT STRATEGY Say what you mean

With the arrival of auto-enrolment, it is vital that members understand how the default option works warns Malcolm McLean, Barnett Waddingham

As we get ever closer to the start of auto-enrolment, there is growing interest and concern about the use of the default option, given the large numbers of new scheme members who are likely to be enrolled into it in the future. Following a...

DB LAW On the hook?

Terry Saeedi and Ruth Bamforth, Eversheds, highlight the main regulatory challenges facing overseas employers with UK DB schemes

We live in a world of ever increasing globalisation. Multinational corporate groups are just one example of this. As business continues to operate across multiple jurisdictions, it is increasingly important for overseas employers to understand the...

TPAS needs you!

As a New Year pension resolution, why not volunteer for TPAS? urges Tony Attubato, TPAS

Forget about dieting, getting fit, or trying to give up smoking. The resolution we hope you make in 2012 is: “I’m going to volunteer for TPAS”. For over 25 years the core of our free service has been delivered by volunteer advisers...

Investment brief

INVESTMENT BRIEF Making ends meet

As the Chancellor saves £60bn by raising the retirement age earlier, pension providers are lagging behind, says Anthony Hilton, Evening Standard

The most telling figure in the Autumn Statement delivered by Chancellor George Osborne in November was that extending the virtual wage freeze on public sector workers is projected to save about £1bn. But government will save £60bn by...

Knowledge bank

BEGINNERS' PAGE Passing the test

Phil Daniels, Capita Hartshead, on how to check if your scheme has got the right qualifications.

By now, employers should be aware that the workplace pension reforms introducing auto-enrolment come into effect from October 2012. The government recently announced that the start for businesses employing between 50 and 3,000 employees would be...

TRUSTEE TOPICS Counting on your support

Are your DC scheme members getting sufficient support at retirement? asks Saqib Hussain, PricewaterhouseCoopers.

The issue of whether members retiring from defined contribution (DC) schemes are receiving adequate support is once again becoming a hot topic in the DC world. Recent research by PricewaterhouseCoopers has shown that pensions arising from DC...

TAX AND BENEFIT NOTES Enacted!

Auto-enrolment and state pension age changes become law as the Pensions Act finally receives the royal assent, says John Wilson, JLT Benefit Solutions

The changes to state pension age (SPA) have been extensively reported in the media and are the main reason that the Pensions Bill took ten months to reach the statute books. So, to avoid further prevarication, the practical impact of the Act in this...

PENSIONS PROGRESS A woman's work is never done

Pensions Act 2011 and state pension age

The Pensions Act 2011 received royal assent on 3 November 2011 following extended parliamentary debate and some modifications from the original Bill. The Act amends the timetable for increasing the state pension age (SPA) to 66, so that the increase...

Letters

To the Editor - January 2012

Defective DC? I read your editorial "Defective DC!" (PW, December, p1) with interest, but I am dismayed that we are still talking about needing a re-think instead of talking about the new ideas being implemented out there. Professor...

News

Long Acre Life aims to capture slice of £1 trillion buyout market

The former chairman of the Pensions Regulator, David Norgrove, is launching an insurance company to deliver de-risking solutions to UK defined benefit (DB) pension schemes. Long Acre Life, set to gain Financial Services Authorisation, in early...

EU set to add to billions to pension costs

Proposed EU pension regulations would add significantly to business costs according to the latest CBI/Towers Watson Pensions survey. Indeed, two thirds (69%) of business leaders are concerned about the prospect of the EU enforcing high deficit...

In Brief - January 2012

HSBC fined £10.5m The Financial Services Authority has issued its largest ever retail fine of £10.5m to HSBC because of inappropriate investment advice provided by one of its subsidiaries, NHFA, to elderly customers. Compensation to...

HMRC relaxes carry forward pension rule

A new interpretation of the pension tax rules has opened up opportunities for pension investors to make significant contributions to their pension scheme. HM Revenue & Customs (HMRC) has announced changes to its interpretation of the "carry...

Buyout push before the arrival of Solvency II

Total 2011 de-risking transactions (to the end of the third quarter) came to £3.85bn, according to JLT Pension Capital Strategies. Pensioner buyins remain the most popular contracts. This is due to affordability, as pensioners remain "...

Employer DC contributions frozen at 7.2%

Average contributions to UK defined contribution (DC) pension schemes have stagnated as firms face tough market conditions and the challenge of introducing auto-enrolment, according to Mercer research. Despite growing steadily for the past ten years...

Pensions industry disappointed at auto-enrolment delay for small businesses

Pensions experts are disappointed at the government’s decision to delay auto-enrolment. Small businesses (50 employees and fewer) will now have an extra year to prepare for the new rules and the new pension contribution responsibilities. They...

International news - January 2012

A roundup of recent worldwide news and developments in the pensions arena, by Anne Bennett, Mercer

Australia: superannuation guarantee reforms approved by lower house Australia’s House of Representatives has approved the government’s Bill to change various aspects of the superannuation guarantee (SG). It will be presented to the...

Uniq in £830m buyin with Rothesay Life

The trustee of the Uniq Pension Scheme (which undertook a groundbreaking deficit-for-equity swap earlier this year) has entered into an £830m buyin contract with Rothesay Life. The scheme trustee operated a competitive tendering process,...

NOW: Pensions wins first customer

The Retail Data Partnership has signed up as the first customer of NOW: Pension Trust (an independent multi-employer trust). The Retail Data Partnership will implement its pension scheme with NOW: Pensions from 1 January 2012. Morten Nilsson, chief...

Association forum - January 2012

The Pensions Advisory Service New advisers I am pleased to welcome Mark Brownridge, Kevin Burge, Keith Garlick, Matthew Gibbons, Christopher Hurst and Paul Mulhern as as new advisers to TPAS. We are always looking for volunteers to help with...

Regulation roundup - January 2012

End of year roundup - January 2012

Defined benefit (DB) schemes continued to feel pressure on their funding positions, defined contribution (DC) came under greater scrutiny and the industry started preparing for the forthcoming pension reforms that will see between 5 and 8m people...

People

IN GOOD COMPANY – January 2012

Pensions World keeps you up to date with the latest news of hires and flyers

Consultants Mike Addenbrooke, CEO of Capita Hartshead, Capita’s pension administration and consultancy business, has been appointed as its first non-executive chairman. Paul Pindar, chief executive of the Capita Group, said: “Mike has...

Statistics

STATISTICS – January 2012

Statistics – January 2012

Surveys

SURVEY GSIPPs Are you a groupie?

Financial journalist Allison Plager explores the popularity of group self invested personal pensions as an employer sponsored pension scheme

Flexibility comes at a price – or at least it does when pensions are involved. Defined contribution (DC) schemes are the inevitable way forward for companies offering a corporate pension plan, as defined benefit (DB) schemes become...

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January 2012 issue

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CONFERENCE DIARY – January 2012

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