The UK pensions savings crisis is not a crisis at all according to new research published by actuaries at Aon Consulting, The Daily Telegraph reports.
That view is based on a survey of 200 firms, including all FTSE 100 final salary schemes.
The positive outlook is based on calculations of corporate bond yields – such investments are a key tool used to match scheme assets and liabilities – with Aon stating another 1% increase in yields would be enough to wipe out most companies’ deficits under FRS17 accounting rules.
Corporate bond yields have risen 0.75% in the past year to 5.75%, meaning the consultants are looking to a yield of 6.75% to save the day.
Half the companies surveyed had a deficit equal to less than 10 months’ worth of corporate profits.
"This suggests that the so-called pensions crisis is in fact manageable for most companies as they should be able to fund shortfalls in their pension funds from future profitability,” says Andrew Claringbold, principal actuary at Aon.
However, the bad news is that Aon has confirmed the TUC’s point of the past week that if the government raises the retirement age to 70 in a bid to narrow the savings gap up to a third of all men will never see their pensions because they will be dead before that age.
The Telegraph notes UNISON, the biggest trade union, yesterday voted to strike if the government raises the minimum state pension age to 55 from 50.
EVERY LITTLE BIT HELPS will become a new tag-line among divorce lawyers after Tesco launched its quickie-divorce service to customers visiting its online legal advice store, the FT says.
For a measly £7.49 customers can purchase a DIY divorce kit, match it with a £4.49 flat rental form, and a £9.99 last will and testament kit with some storecard points thrown in for good measure.
The services are being launched ahead of the publication of a review by former Bank of England deputy governor David Clementi, which is expected to recommend significant liberalisation of the market for legal advice, the paper says. SOME YEARS ON and the ghost of Enron, the collapsed US-based energy trading company, have come back to haunt three UK-based bankers who now face extradition proceedings triggered by the US government, The Times reports.
David Bermingham, Giles Darby and Gary Mulgrew were managing directors of Greenwhich NatWest, a company since bought by Royal Bank of Scotland, and are accused of having taken part in a fraud involving the manipulation of the sale price of a business bought by Enron.
While Enron spent about $30m buying the business, it was sold by the previous owner for about $1m, with the accused and at least one Enron executive pocketing the difference.
JOB LOSSES IN Scotland’s financial services sector are inevitable as companies look to offshoring their operations, according to statements from Scottish Financial Enterprise reported in The Scotsman.
The sector, which accounts for 10% of Scots jobs, is being squeezed by increased regulation at home coupled with public mis-trust of providers because of mis-selling scandals, while cheaper offshore locations offer companies the ability to boost their profits.
Part of the answer to this is to look to copy Dublin, SFE says, by increasing the number of “numerate and literate” , helping to reduce the costs of being located in Scotland.IFAonline
Women and young people adversely affected
A question of selectivity
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