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March 2014

A month in the life……of Pensions.

I write this on the morning of St. Patrick’s Day, in advance of the inevitable pint of Guinness and the attempt to connect with my, non-existent, Irish roots, along with many others.

Breaking up is hard to do

Whilst on the Celtic theme, let me look at the vote for Scottish Independence. The ‘No’ campaign claims that “Scottish pensions would be put in danger if voters decided to spilt from Britain”. The reason for this says the Treasury’s Chief Secretary, Danny Alexander, is that British state guarantees would no longer be in place. Current polls suggest the split is unlikely (32% for independence, 57% against and 11% undecided) although with six months or so until the vote, there remains time for swing voters to be convinced one way of the other.


Alex Salmond dreams of Scottish Independence

Once in a lifetime

Savers have been warned that, from April 6, the lifetime allowance will be reduced from £1.5m to £1.25m, with a tax charge of 55% for anything in excess of this. Estimates suggest that around 360,000 pension savers will be hit, between now and 2030…I, along with millions of others, have a long way to go before this becomes a concern, though.

Occupational hazard

A couple of Defined Benefit schemes hit the headlines in recent weeks.

Boeing has frozen DB pensions for around 68,000 employees, moving them to Defined Contribution arrangements from 2016. The employer claims that the change will deal with the “unsustainable growth” of the scheme’s long-term liability – sentiments that will, no doubt, be echoed by many other employers.

It was also reported that the Public & Commercial Services union (PCS), the trade union that encouraged civil servants to strike over changes to their pension scheme, is facing its own ‘pensions crisis’ due to a £65.5m deficit between its two DB schemes. This figure is said to be more than twice the union’s £27.6m annual income. The PCS has, allegedly said that “it is no longer affordable to maintain benefits at current levels” and “no one single change to benefits is going to be sufficient to bridge the gap”.

Return to sender

We are told that the freezing of the state pension, for some of those who emigrated, is causing many to return to the UK due to lack of funds. 560,000 expatriates had their pension frozen at the point they left the country, meaning they do not receive the current £110.15 but a proportionally lower amount. Around 50% of pensioners who live abroad in some countries e.g. France, Spain and the USA, receive annual increases. Others e.g. South Africa, Canada and Australia do not. To level the playing field for the next year alone would cost around £590m, so I don’t expect to see the situation thaw any time soon.

And finally

The current Pensions Minister, Steve Webb, visited the Boleyn Ground (home of West Ham United Football Club) to celebrate the three-millionth person auto-enrolled into the workplace pensions scheme. Reports that the East Stand echoed with chants of ‘who’s the ******* in the tie’ are unsubstantiated.


West Hams latest signing, looks to live up to his transfer fee

And now, I depart for that pint of the black stuff…maybe even two – I wonder how that will affect my mortality?!

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Category : A month in the life of pensions — admin @ 2:02 pm March 24, 2014

Reassessing the Covenant

In February, Jackal’s Simon Kew was asked by Pensions Age for his views on employer covenant, the Pensions Regulator and the post- recession landscape.

You can read the full article here.

Category : Savants in the News — admin @ 9:22 am March 11, 2014

PMI Question Time

On the 13th of March, our Director of Pensions will be sharing the stage with two of the most respected and recognizable people in pensions – Robin Ellison and Malcolm McLean.

The event, being held at the offices of Squire Sanders in Leeds, will see Simon Kew debating the future of pensions regulation, with the other members of the panel.

Places for this event will be highly sought after and very limited, so to book your place and for further details, please click Question Time 2014.

Category : Savants in the News — admin @ 12:39 pm March 4, 2014

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