HUNDREDS OF thousands of staff will not be able to benefit from pension reforms coming into force this week as two major surveys are thought to have found many big companies are unprepared for the changes, according to the Daily Telegraph .
Research by Prudential suggests around 1,200 businesses will not have completed planning for their employee benefit changes before "A-day", when new pension "simplification" rules come into force.
One in eight of these companies claimed costs for rolling out the reforms for employees were prohibitive, and one in six said a pension scheme shortfall had to be the company's priority.
A second study by Close Wealth Management also found four in 10 of employers have not prepared adequately for A-day, although just over half were communicating the changes to higher earning executives.
Public, education and health employers are least likely to be prepared for A-day changes, says the Pru, with nearly a fifth not expecting to be ready by April 6.
The construction industry fared only slightly better, with retail and wholesale, and the manufacturing sectors being even better prepared. More than nine in 10 finance and insurance companies said they were ready for A-day.
STANDARD LIFE IS considering a flotation on the London Stock Exchange now worth £2bn - twice the amount that observers expected, says this morning’s Times.
The mutual apparently wants the money to help to fund projects in India and China. It is also thought to be weighing up a return to plans to move into France, having pulled out of the market two years ago.
But the decision to seek new capital will raise fears that the existing owners of Standard Life will receive less in windfall payouts.
A FORMER CHALLENGER to the Standard Life board has questioned the life assurer’s supposed consideration to double the amount of money it raises via a flotation this summer to £2bn, says the Scotsman.
Criticism from Michael Hogan - a former investment banker who last year unsuccessfully challenged for a seat on the Standard board - follows speculation the company believes there might be much greater appetite for the float among investors than previously thought.
It was originally thought Standard Life was looking to raise £1bn, but that figure may now have been doubled to £2bn on the back of investor potential feedback.
Hogan believes the Standard Life board’s record “is poor in managing capital and making investment decisions” so he believes the firm should consider a mixed capital structure rather than such a large equity-led flotation.
"Rather than a straight equity issue, I would favour a [component] of debt and convertibles. That would reduce the risk for Standard Life members and at this stage of the game is very much what we should be striving for," says Hogan.
AND BRITAIN’S TOP 100 companies saw the deficits on their final-salary pension schemes almost halve in the last two months, says the Guardian.
Actuarial firm Deloitte & Touche says the government’s plans to meet a greater proportion of its borrowing requirements by issuing more long-dated government bonds has helped cut final salary pension scheme deficits from £110bn in mid-January to £60bn.
At the same time, however, David Robbins, a partner at Deloitte & Touche, said: "Deficit movements over the first three months of this year indicate how volatile company pension deficits can be."
According to Deloitte & Touche, pension scheme assets have risen by £10bn this year as the expected rise in the supply of long-dated gilts has meant a fall in the price.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Julie Henderson on 020 7968 4571 or email [email protected].IFAonline
Two global vehicles
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