Personal Accounts rebranded NEST
by Gill Montia
Story link: Personal Accounts rebranded NEST
The Personal Accounts pension initiative due to be introduced in 2011 has been renamed the National Employment Savings Trust (NEST).
NEST is aimed at workers who are not members of employers’ schemes, with the target group aged 22 and over and with earnings of between £5,035 and £33,540.
Once the scheme is fully up and running in [...]
Only one in ten DB pension schemes welcomes new entrants
by Gill Montia
Story link: Only one in ten DB pension schemes welcomes new entrants
A survey of the UK’s private pension schemes has revealed that nine out of 10 defined benefit schemes are closed to new entrants, with one in five even closed to future accruals from existing members.
Research from the Association of Consulting Actuaries (ACA) has also revealed that over half of the UK’s defined contribution schemes are [...]
KPMG reports a “lost decade” for pensions
by Gill Montia
Story link: KPMG reports a “lost decade” for pensions
A new report from KPMG suggests that the last ten years could become known as the “lost decade” for pensions.
According to the accountancy firm, average pension scheme returns have been less than half that of bank deposits, growing assets by just over 2.25% a year (excluding costs).
Based on a fairly typical investment strategy over the [...]
Pension transfer incentives a threat to employees
by Gill Montia
Story link: Pension transfer incentives a threat to employees
The Pensions Regulator has called for greater scrutiny of transfer incentive exercises, and is warning trustees of the risks these pose to members of company pension schemes.
The credit crisis and recession has prompted many employers to review their pension provisions in efforts to reduce liabilities, particularly for Defined Benefit (DB) schemes.
However, the watchdog’s chairman, David [...]
Annuity rates plummet 45%
by Gill Montia
Story link: Annuity rates plummet 45%
The Pensions Advisory Service has confirmed that many workers approaching retirement today are facing the lowest payouts in history.
The Service, which is a government-funded organisation that provides information and guidance on all pension matters, has followed up research from financial information website, Moneyfacts.
A study of the market found that workers are likely to get just [...]
Only 23% of DB pension schemes open to new members
by Gill Montia
Story link: Only 23% of DB pension schemes open to new members
New figures from the National Association of Pension Funds (NAPF) show the extent to which the recession has continued to take its toll on private sector defined benefit (DB) schemes.
In its annual survey the body, which represents 1,200 UK workplace pension schemes, found that only 23% of schemes remain open to new members, compared to [...]
Personal Account pension scheme delayed
by Gill Montia
Story link: Personal Account pension scheme delayed
The introduction of the Personal Account pension has been delayed for a year, meaning the government scheme will not be fully operative until 2016.
Personal Accounts are aimed at people who don’t belong to employers’ schemes.
They were originally due to be launched in 2012, although phased in over three years.
The target group is workers aged 22 [...]
Pension Quality Mark launched for company schemes
by Gill Montia
Story link: Pension Quality Mark launched for company schemes
The National Association of Pension Funds (NAPF) has launched a quality mark for defined contribution schemes.
The move is aimed at helping employees judge the quality of a company pension scheme and the award is only given where certain minimum standards are met, including employer contribution levels at 6%.
The amount is double what will be required [...]
Defined benefit pension scheme deficit hits £1tn
by Gill Montia
Story link: Defined benefit pension scheme deficit hits £1tn
New figures from Aon Consulting estimate the combined deficit of the UK’s 8,000 defined-benefit (DC) pension schemes in the private sector at over £1 trillion.
However, the firm puts the liabilities faced by the 200 biggest schemes at £78 million at the end of last month, up only £3 million from the end of June.
The size [...]
PwC perspective on public / private sector pension gap
by Gill Montia
Story link: PwC perspective on public / private sector pension gap
Private sector discontent over the prosperity gap between private and public sector pensionners will be fuelled by a new report from PricewaterhouseCoopers (PwC).
While private sector workers in defined contribution schemes receive an average employer contribution of around 6% of salary, public sector workers in their final-salary schemes could be receiving an employer contribution of up [...]
Death knell sounded for defined benefit pension schemes
by Gill Montia
Story link: Death knell sounded for defined benefit pension schemes
A new report on UK company pension schemes suggests that half of all defined benefit schemes will close within the next three years.
The cost of providing the schemes is escalating as a result of increased longevity.
At the same time, funds have lost value during the credit crisis.
As a result, the majority of the UK’s defined [...]
Leading UK firms carry £96bn in pension deficits
by Gill Montia
Story link: Leading UK firms carry £96bn in pension deficits
The pension funds of the UK’s leading companies have seen a huge rise in deficits over the last 12 months.
A new report by consultants, Lane Clark & Peacock (LCP), based on the FTSE 100 stock index, concludes that the combined deficit rose to £96 billion last month, compared with total deficit of £41 billion a [...]
Pension funds warned of EU alternative investment directive
by Gill Montia
Story link: Pension funds warned of EU alternative investment directive
The global organisation that represents the Hedge Fund industry has warned that a European directive on Alternative Investment Fund Managers could blight the pension industry.
The Alternative Investment Management Association (AIMA) claims that the European Commission’s draft proposals could cost Europe’s pension fund industry up to €25 billion a year, if implemented in its current form.
AIMA [...]
Transfers and ill-health dominate pension complaints
by Gill Montia
Story link: Transfers and ill-health dominate pension complaints
The Pensions Ombudsman, Tony King, has published his annual report for the period 1st April 2008 to 31st March 2009, which puts the number of new cases in need of investigation at 742.
The figure is much in line with previous years and the report notes “the economic downturn and its impact on pension funds is [...]
Defined benefit pension deficit soars
by Gill Montia
Story link: Defined benefit pension deficit soars
The financial crisis has seen the combined deficit of the UK’s 200 leading defined benefit pension schemes increase to £73 billion.
New research from Aon Consulting shows the shortfall soaring in June, largely as a result of falling yields on corporate bonds.
According to Aon, defined benefit schemes are shifting investment strategies away from equities in response [...]
Women lose ground in pension gender gap
by Gill Montia
Story link: Women lose ground in pension gender gap
The impact of the recession on retirement planning among women is highlighted in the latest UK pensions’ report from Scottish Widows.
According to the life assurer, the number of Britons contributing the 12% of salary recommended to provide an adequate retirement income has risen slightly in the past 12 months, from 51% to 54%.
However, the gender [...]
Final salary pensions schemes “unsustainable”
by Gill Montia
Story link: Final salary pensions schemes “unsustainable”
UK firms could close final-salary pension schemes en-mass, according to a new report from PricewaterhouseCoopers (PwC).
In a survey by the accountancy firm 96% of businesses viewed their defined benefit schemes, which are based on salary plus years of service, as unsustainable.
The research also revealed that 16% had already closed their final-salary schemes to new members.
Furthermore, [...]
Personal Accounts no answer to UK pension shortfall
by Gill Montia
Story link: Personal Accounts no answer to UK pension shortfall
The Institute for Fiscal Studies (IFS) has been assessing the future impact of Personal Accounts and has concluded they will have a “relatively small” affect on the UK’s pension shortfall.
The Government-backed scheme, which is aimed at people who don’t belong to employers’ schemes, is due to be introduced in 2012.
It is aimed at people aged [...]
Over 55s still confused about annuities
by Gill Montia
Story link: Over 55s still confused about annuities
Three quarters of workers coming up to retirement are in danger of losing out on pension income because they are not shopping around for their pension annuities.
Research by Just Retirement found that 75% of over 55s questioned did not have a full grasp of their retirement funding options, particularly the right to shop around for [...]
Pensions Regulator warns of increased fraud risk
by Gill Montia
Story link: Pensions Regulator warns of increased fraud risk
The Pensions Regulator is alerting pension scheme trustees, employers and advisers to the increased risk of fraud during the recession.
The body, which regulates UK occupational pension schemes, has stated that the economic downturn “may accentuate the vulnerability of some schemes to certain actions which give us cause for concern”.
The watchdog is at the same time [...]
