SOME OF Britain's most prominent business leaders have delivered a rebuke to Tony Blair after the government backed down on public-sector pension reform, according to The Times .
In a letter 16 business leaders accused the Prime Minister of setting “a poor example to the country” by abandoning plans to raise the pension age for public sector workers from 60 to 65, says the The paper.
The letter was written by John Sunderland, president of the Confederation of British Industry (CBI), and co-signed by businessmen including Martin Broughton, chairman of British Airways, Stuart Rose, chief executive of Marks & Spencer, Nick Land, chairman of Ernst & Young, and Paul Walsh, chief executive of Diageo.
Sunderland spelled out the “strength of feeling that exists within the business community” about the growing disparity between public and private sector pension provision. He wrote that, although the letter’s 16 co-signatories alone employed more than half a million workers, “many more, large and small alike, have expressed to me their deep concern”.
The CBI’s criticism came just over a week after Alan Johnson, the Trade and Industry Secretary, caved in to union demands to protect the current terms of the final salary pensions of three million existing public sector workers.
MORE THAN 2,000 companies will have difficulty meeting the proposed guidelines for reducing their pension deficits, pension experts warned on Monday, according to the Financial Times.
Watson Wyatt, actuarial consultants to half the pension schemes in the FTSE 100, said a large number of companies would “not be able to afford to meet funding targets” set out by the pensions regulator.
Nigel Bodie, senior consultant at Watson Wyatt, said the goal of eliminating pension deficits under FRS17 accounting rules within 10 years was “tough”.
But even the amount disclosed under these rules is thought to be only 80% of what is needed to guarantee all promised benefits to a scheme's members.
The regulator based its proposals on research from PriceWaterhouseCoopers which showed that roughly 80% of employers could pay off their debts in full within 10 years.
But, echoing Watson Wyatt's concerns, the CBI insisted 10 years was too short a time for the repayment of pension debts.
LEGAL & GENERAL (L&G) yesterday named Peter Chambers as its investment chief in a move that will see more of the insurer's top fund managers running hedge funds, reports the Daily Telegraph.
L&G is the biggest shareholder in the FTSE 100 and Chambers said his main priorities would be expanding the company's index tracking and fixed interest businesses.
However, he said he would be keen for more of the company's active money managers to run hedge funds alongside their existing funds.
The concept was embraced by both Gartmore and Framlington, his previous employers and, despite the company's recent difficulties, Gartmore now has a sizeable hedge fund business.
L&G so far has only one hedge fund focusing on Japanese equities. It is run by Andrew Nagele. Chambers will be replacing Tim Breedon, who will become the insurer's chief executive when David Prosser retires at the end of the year.
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