INSURANCE MUTUAL Standard Life has won the largest single piece of new business in its 181-year history just two months before it is due to float on the London Stock Exchange with a £5.5bn price-tag, reports The Daily Telegraph .
According to the paper, the Edinburgh-based insurer clinched a £700m pension deal with investment bank Citigroup, beating off what is understood to be fierce competition from at least two rival providers.
Citigroup, the world's largest investment bank, has four defined contribution schemes worth a total of £700m, with 20,000 members. Standard Life will provide the investment platform for the four schemes, from which some of the £700m will be invested through Standard Life funds.The rest will be invested with other major fund management companies.
The pensions mandate was awarded by the trustees of the Citigroup UK pension plan following a due diligence review of investment options. It is thought the trustees were particularly pleased with Standard Life's so-called "investment gateway" for managing defined contribution schemes, which allows trustees and members alike access to a range of leading fund managers.
The whole process will be managed by Standard Life Investments, which was set up in 1998 and already manages £28.1bn of third party assets.
PAYMASTER, THE PRIVATISED arm of the Paymaster General’s Office, has emerged as a candidate to run the Government’s new national pensions savings scheme, The Times has learnt.
Tomorrow Stephen Timms, the Pensions Reform Minister, will meet Paymaster, which already administers the payment of one in every eight UK pensions, including payment of the NHS and Armed Forces’ retirement benefits and annuities for Norwich Union, Britain’s biggest insurer.
Timms is thought to be interested in Paymaster’s claims that it can keep administration costs low enough to bring the annual charge for a national savings scheme down to 0.3%, including fund management, within seven years.
Paymaster is part of Xafinity, the benefits and consultancy company acquired by Duke Street Capital, the private equity firm, last July for about £120m, including debt. Xafinity’s non-executive directors include Sir Nicholas Montagu, former chairman of the Inland Revenue.
The Pensions Commission proposed last November the creation of a National Pensions Savings Scheme (NPSS) to encourage people without occupational or private retirement plans to save. Lord Turner of Ecchinswell, the commission chairman, suggested that the basic annual management charge on an NPSS account be about 0.3% of savings.
Paymaster is expected to tell Mr Timms that it could collect workers’ contributions to the NPSS by direct debit, based on lists of workers supplied by companies. Paymaster would pass payments to whichever of a limited number of government- approved fund managers or trusts the employee chose. On retirement, the savings would be used to buy an annuity.
COMPLAINTS AGAINST high street banks rose by almost half last year amid growing signs of public dissatisfaction with the sector, which has reported record profits, reports The Financial Times.
The Banking Code Standards Board, which operates a voluntary code of conduct for the industry, said it had received 3,500 complaints and enquiries in 2005 – up by half since 2004.
The board raised the prospect of action by the Financial Services Authority City watchdog, against those banks that were not handling complaints in an efficient way. Officials from the board have already met the FSA to discuss cases where banks have not met the watchdog’s eight-week deadline for dealing with complaints.
The BCSB received 1,200 complaints in the six months from August 2005 to January 2006, of which the highest number were complaints from consumers about rates of interest and penalty charges levied by banks.
The figures come just weeks after the OFT announced a crackdown on credit card lenders and ruled late payment charges on cards were “unfair”. The regulator said these charges were “unlawful” and generated annual profits of £300m for the industry.
The regulator has given the industry until the end of May to respond to its proposal to limit all such charges to a maximum of £12 – less than a third of the penalties currently levied by many leading lenders. In a move which has also infuriated the banks, the regulator has also ordered them to consider curbing penalty fees on overdrafts and mortgages.
The latest complaint figures come weeks after the Financial Ombudsman Service said it was braced for a sharp rise in consumers complaining about banks, in particular over rising fees and charges.
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