The row over the decision by UK plc to cut final salary schemes took another step up the political a...
The row over the decision by UK plc to cut final salary schemes took another step up the political agenda yesterday when the head of the Amicus union lambasted the retreat and found support from a former pensions minister The Scotsman says.
Both are lending their support to the idea the the government should step in to avoid a situation of more widespread pensions poverty.
A report from KPMG suggests workers kicked out of final salary schemes could be 30% worse off on average.
UK companies respond that new accounting rule FRS17, which forces them to account for pensions liabilities on the balance sheet is forcing them to take the action.
Amicus general secretary Roger Lyons warns the government's plans to encourage private pensions could be under threat if it is perceived that those taking out pensions will be left unprotected against future changes implemented by pension providers.
The Times says there is growing evidence that companies not prepared for FRS17 will not be able to get their accounts signed off in time for presenting results.
It quotes chartered accountant Mazars Neville Russell and KPMG as saying accounts would have to be qualified where they do not feel the company has paid enough attention to FRS17, while many companies are already said to be behind in their data collection.
"Accountants have also given warning that firms' distributable reserves could be wiped out by large pension shortfalls which, under the Companies Act, would ban the payment of dividends. The Financial Services Authority has said companies that face these problems must immediately inform it," The Times writes.
The Telegraph says the Bank of England is trying to put a lid on interest rise fears after governor Eddie George yesterday told a City of London conference that such fears were overdone.
Recent figures showing a jump in inflation during January and continued strong house price rises along with rising household debt have persuaded many market watchers to raise their interest rate forecasts.
Eddie George said those presumptions were jumping the gun, or in his words: " Our impression is that it includes quite a significant term premium.
The current futures market indicates interest rates could be up to 5.25% by the year end, The Telegraph writes, with the next rate decision set for 7 March.
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