WORK AND PENSIONS minister Andrew Smith has ordered his department to draw up rules to be included i...
WORK AND PENSIONS minister Andrew Smith has ordered his department to draw up rules to be included in the pending pensions Green Paper that would prohibit solvent companies from arbitrarily ending their final salary schemes, the FT today reports.
The paper says the commitment came after Danish shipping company Maersk decided to end its final salary scheme, leaving members up to 60% short of expected pension income.
Smith is also being driven by the realisation that the government promised action on precisely this issue some 18 months ago, but only now is realising what is committed to, the paper adds.
Meanwhile, the government is also on the back foot over this weekend's reports that it is to cut tax relief for higher income earners on pension contributions - something the ABI says could leave 1 million people having to boost their contributions by £30 per month, even with a matching 30% grant..
THE PENSIONS SAVINGS gap is getting bigger all the time according to The Times' piece on the £43bn gap between government estimates of pensions savings last year and the latest Office for National Statistics figures.
Instead of the £86.4bn ministers say was tucked away last year, the ONS says just £43.7bn was actually saved, putting huge pressure on the government to get its pension reform right, the paper says.
The problem stems from the fact previous government figures did not come net of transfers, refunds and surrenders, with transfers from one manager to another in particular being counted as "new" money.
The Times quotes former pensions minister Frank Fields as saying the news is evidence of a "whirlwind" about to hit government.
THE MAGIC CIRCLE of split capital investment trust managers will be laid bare today according to The Scotsman, as evidence gathered by lawyers representing a £100m class action lawsuit is handed over to MPs investigating the stricken sector.
Names in the list compiled by Class Law include Chris Fishwick, the Aberdeen Asset Management director who resigned last week, Anthony Townsend, chairman of the Association of Investment Trust Companies, and Tony Reid, chef executive of BFS, the paper says.
Some 130 names will be revealed in total before MPs of the Treasury Select Committee today, the paper adds, as well as letters showing that financial advisers did not properly understand how split capital investment trusts worked, and other letters showing splits directors knew their zero dividend preference shares were not low-risk.
THE PRU'S decision to apply penalties on funds withdrawn from with-profits policies draws ire from The Daily Telegraph today because of the letter the company sent to advisers during the past month in which it committed to not applying additional MVAs on policies.
The pledge was to not apply any MVA on withdrawals of less than £25,000 per year, but that has been scrapped for a £10,000 limit only on policies that are five years or older.
The Telegraph quotes Towry Law's Clive Scott-Hopkins as saying that applying an MVA now must mean there has been a run on the funds "and finally the Pru has had to pull the shutters down".
£1bn business since inception
Considered doing so in 2015
Client communication considerations
Aviva: ‘We are sorry’
FOI from Professional Adviser