NORWICH UNION will today launch the life insurance industry's fiercest attack yet on plans for a charge cap on the government's new national savings scheme, according to the Times.
Gary Withers, chief executive of Norwich Union Life, will tell the government insurers “cannot be expected to run the scheme at a loss” and suggests the national pensions savings scheme should be charged at 0.6% of contributions, rather than the 0.3% proposed by the Pensions Commission, says the Times.
NU also wants the number of providers of NPSS savings accounts limited to 12, despite the ABI’s suggestion even new entrants to the savings market should be permitted to offer the products.
FINANCIAL PRODUCTS designed to profit from companies' pension problems are proof that the crisis is bottoming out, experts have told the Daily Telegraph.
Insurers Aviva, Legal & General and Prudential have been buying companies out of their ever-growing pension deficits, in the expectation that they will make a substantial return, according to Peter Maher, a director at accountants Smith & Williamson.
The cost to companies of taking out these products is still punitive, but three of Maher's clients are "considering such a move" because "the deficit is an issue for companies that want to buy, sell or merge". As long as companies have a deficit, all corporate activity has to be cleared by the pension trustees.
But those who have already sold their funds are said to have done better from the deal, as it is suggested the long-term valuations are not as good as acquiring companies might have hoped.
Insurers make their money by buying a company's pension assets and putting up a sum equivalent to the deficit, on which interest is charged. The insurer then invests the sum in a better asset class than bonds, making two sets of returns.
Others looking at setting up buyout funds to offer similar products include financier Hugh Osmond, former Prudential chief executive Mark Wood and private equity group Duke Street Capital.
HOUSING GROUPS HAVE attacked government plans to introduce home information sellers’ packs by June next year as “unrealistic and lacking in detail”, continues the Times.
Having unveiled the timetable for implementation of Hips yesterday, the Office of the Deputy Prime Minister has been accused of creating a timetable which is “extremely challenging and probably optimistic” by the National Association of Estate Agents.
William Tew, of the Royal Institution of Chartered Surveyors, also added: “The industry cannot be expected to develop a framework to qualify and regulate professionals to work in this field while the rules of the game are continually changing, particularly…without proper consultation and agreement.”
AND INSURANCE group AXA is cutting up to 350 jobs at its Bristol and Coventry life pensions and investment operations, says the Scotsman.
A statement issued yesterday revealed new business increased by 16% last year but profits remained "flat" as costs rose so AXA is hoping to achieve the job losses through a combination of redeployment, retraining, and close control of recruitment, as well as a voluntary redundancy scheme where possible.
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