Opinion – Page 10
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OpinionJen Ackerman: Employers need to invest time in pensions auto-re-enrolment
For many large employers their staging date is a distant memory and auto-enrolment has become business as usual. Nevertheless, there is still more to do as the third anniversary marks the first re-enrolment cycle.The good news is employers do not have to repeat everything they did on their staging date. ...
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OpinionRob Barrett: Pension schemes must meet new freedoms
Since the government pension reforms in April, many pension providers have been reviewing their default funds. They have looked at whether their products will continue to meet the needs of their investors, and whether they are providing what people are looking for in the new environment.In particular, plans have looked ...
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OpinionBill Longe: What if pensions tax relief was scrapped?
“When you see someone putting on his big boots, you can be pretty sure that an adventure is going to happen.” AA Milne, Winnie-the-Pooh. Another Budget and yet more changes to pensions tax relief. Coupled with the announcement of further consultation on the subject, it is not difficult to reach ...
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OpinionEffective financial education for those considering retirement
The most radical pensions overhaul in nearly a century has arrived. These changes offer employees in a defined contribution (DC) scheme who are aged 55 or over greater flexibility in how to access their pension. But without the right financial education, employees could be left incredibly vulnerable to making poor ...
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OpinionPenny Cogher: Complexities and uncertainties around pensions during insolvency
The Supreme Court judgment in the case of Trustees of the Olympic Airlines SA Pension and Life Assurance Scheme v Olympic Airlines looked at what connection a foreign employer must have with the UK to entitle an English court to wind it up, if its centre of main interests is ...
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OpinionFreedom and choice: finding the right voice
Key pointsEmployers retain a bond of trust with employees: staff will go to their employer for advice.Anticipate their needs to create a strategy to offer valuable support at a critical time, especially defined contribution (DC) scheme members approaching retirement.The pension revolution has only just begun. The after-annuities era will continue ...
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OpinionFuat Sami: What abolishing pensions contracting out means for employers
For the best part of 50 years, employees and employers of defined benefit (DB) schemes have been able to contract out of the additional state pension.For employees, this has meant paying a lower rate of national insurance contributions (NICs) and building up less state pension in exchange for an equivalent ...
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OpinionGeorge Bull: Scrapping of 55% tax rate on pensions goes further than expected
Before this announcement, members of defined contribution (DC) pension plans faced a difficult choice. If they opted for an annuity but died early, then the annuity provider would profit, but if they did not take one and instead left their funds in the pension pot, then the taxman would take ...
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OpinionRicky D’Ash: The long road to pensions wind-up
Often there are deficits to make good, as well as the various fees to maintain the scheme from actuaries, consultants, trustees and pension lawyers. It is no wonder that employers want to remove these liabilities from their books as quickly as possible.I am currently involved in the wind-up of three ...
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Opinion
Liz Wood: Contract-based pension schemes versus master trusts
Contract-based DC schemes and master trusts have both been around for years, despite the recent rebranding of master trusts. Both types of scheme are seeing a surge in popularity, spurred on by the arrival of auto-enrolment. The obvious appeal of both contract-based schemes and master trusts for employers is the ...
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Opinion
Helen Ball: Spotlight on pensions governance
Every employer will be making an important decision when it chooses a pension provider. Many scheme members are not engaged in looking after their pension savings, which increases the pressure on employers to make sure employees are protected properly. How can employers be sure they are doing the right thing?There ...
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OpinionThibault Jeakings: DC pension governance to beef up schemes
As well as significantly beefing up defined contribution (DC) schemes’ governance requirements, the proposals also clamp down on the costs of auto-enrolment schemes with a 0.75% cap on administration charges and a ban on additional charges for deferred members and commission payments.The proposals are a reaction to the six to ...
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OpinionDamian Stancombe: Will DC pension members have too much flexibility?
Chancellor George Osborne’s announcement has effectively turned DC arrangements into later life savings vehicles rather than a retirement vehicle.Employees are no longer required to use all or part of their pension pot to secure an annuity income until death.Instead, the government has, in my opinion, wrongly put full trust in ...
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OpinionJonathan Watts-Lay: Staff need education on investment options
Despite this, news headlines highlighting unfairness in the annuity market for those who are retiring and will buy an annuity now (about 400,000 people a year) are commonplace.Data from Money Advice Service annuity comparison tables at 3 February 2014 suggests that, of employees and pension scheme members who relied on ...
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OpinionMatthew Webb: The joy of DC investment loss
But is positive return really the zenith of DC investing? In the long term, perhaps, but in the short term, especially in the early years of DC build-up, there is a strong case to suggest a DC investor should look for funds with a decreasing unit price. Why?First rule of ...
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OpinionSimon Chinnery: The evolution of default funds
There are many different types and designs of default fund, resulting from more than a decade of market developments, but they can be broadly categorised as old style, lifestyle and alternative style. Old-style default funds are often single funds, and the old-style approach has been used for over 20 years, ...
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OpinionSimon Chinnery: Plenty of guidance on good governance
Evidence points to the majority of savers wanting someone to take responsibility for their investment decisions, so figures of 70-85% of scheme members opting for the default strategy are the norm. The millions of new savers entering DC for the first time as a result of auto-enrolment is likely to ...
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Opinion
Jonathan Dowden: SMEs do not have bandwidth to deal with auto-enrolment
Smaller employers just do not have as much bandwidth to deal with the increased demand on people carrying out the administration associated with auto-enrolment, or the increased time it takes to understand the legislation and communicate it effectively to employees.The financial burden is also something that small businesses will not ...
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OpinionIan Luck: Tax guidance for auto-enrolling weekly-paid employees
But without doubt, employers of weekly-paid staff will find compliance with the regulations extremely onerous.Any employee earning more than £182 per week must be automatically enrolled, when eligible, with contributions being based upon earnings above £109 per week. With the current minimum wage at £6.19 for over 21 year olds, ...
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Opinion
Ant Donaldson: High employer pension contribution leads to engagement
I respond to Richard Fleet’s description of auto-enrolment contributions as “a payroll tax” in your September letters page and that an employer contributing above the minimum “is putting itself at a competitive disadvantage”.At E.On, we believe it’s important to help employees to retire comfortably. Consequently, we auto-enrolled all of our ...