RAILWAY leaders are considering abolishing some final salary pension schemes for new staff after a r...
RAILWAY leaders are considering abolishing some final salary pension schemes for new staff after a review that is understood to have found deficits across the UK's sixth-biggest fund, says the FT.
A report by actuaries to be presented today to the trustees of the £14bn Railways Pension Scheme is believed to recommend that companies and employees halt a half-contributions holiday. This would end lower payments between one and four years early, and the RMT union said some em-ployers and employees could need to increase contributions even more.
Railtrack, the biggest contributor, is expected to double payments to 15% immediately, and double staff payments to 10% over three years. Based on last year's half-rate contributions, the industry is likely to have to pay in at least another £160m a year.
BT could also be forced into a cash call to plug a £5.5 billion pension fund deficit, analysts said yesterday, amid increasing concerns that the telecoms group has underestimated the scale of its scheme's funding problems, adds the Times.
In research from Goldman Sachs it is calculated that the assets of the £27 billion pension fund have shrunk by £4 billion since the end of March. The scheme is heavily invested in falling equity markets.
The report said that the diminishing assets left BT facing a £5.5 billion shortfall, up from £1.6 billion at the end of last year, which the company would need to make up unless equity markets improved.
The shortfall was calculated using complex actuarial assumptions that take a long-term view of liabilities and assets rather than the FRS17 accounting standards, which take a snapshot view of market conditions. Under FRS17 the deficit would be closer to £5.8 billion, according to both Goldman Sachs and a recent report by UBS Warburg.
SPECIAL tax deals enjoyed by super-rich foreign nationals, such as Mohammed Al Fayed, look set to wither on the vine rather than be scrapped early, reports the FT.
Despite Fayed's legal action to retain his tax position, it is now thought the government is reluctant to tear up the privileged tax arrangements enjoyed by a few wealthy people who live in the UK but are not British citizens.
Since 1985 they have entered into so-called forward tax agreements with the Inland Revenue that involve lump sum payments over a fixed number of years.
The Inland Revenue said yesterday that five agreements, which could cover an individual or several people, were still in place. The deals avoid the need for annual assessments of income and capital gains for tax purposes because the foreign nationals have finalised their liabilities in advance.
AND CONFIDENCE in the property market is at its lowest for two years, according to a survey by Alliance & Leicester, says the Daily Telegraph.
The moving/improving index of 4,000 adults last month showed the number of people planning to buy a home in the next two years had dropped from 15% last summer to 11%.
It said the decisions were caused by warnings from commentators that property prices cannot continue to rise and might even fall in the near future.
However, people in their 20s were sustaining the market, with one in four looking to purchase a property in the next couple of years.
An added tier of asset management can of course deliver additional benefits for certain investors, writes Graham Bentley - just be sure you can justify it to the regulator and, especially, the client
The government is "in daily contact" with industry figures over the pensions dashboard as it prepares for the roll-out and its feasibility report, Guy Opperman has said.
Organisation led by Johnny Timpson
From 1 April 2019
Available in eight languages