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Altmann fears firms dumping liabilities in protection fund

Independent consultant Ros Altmann, who convinced the Government to bring in a pension protection fund, says the way the fund has been drafted could lead to teetering companies dumping it full of liabilities in the first year.

The plans were published in last week&#39s Pensions Bill.

Altmann says the Department for Work and Pensions&#39 decision to make contributions flat rate in the first years rather than include a risk-based premium for poorly funded schemes means that good companies will foot the bill of negligent rivals. She is also asking the FSA to streamline the advice process by allowing initial stages of a full independent advice assessment to be carried out in large groups.

Altmann&#39s plan would see groups of up to 50 employees go through initial fact-finds together, with a 30-minute face-to-face session with an IFA once all initial data had been collated. The service could be offered to employees by advisers taking commission on any products sold, with no cost to employers.

Altmann says: “I am disappointed that the DWP is unable to implement a risk-based approach from day one. A lot of insolvent schemes are waiting for the PPF to be set up so they can dump their funds in it.

“The problem is that the DWP has failed to address the issue of how to work out the levy for underfunding. It is parked in the too-difficult box.”

A&B head of pensions Michelle Cracknell says: “I agree with the principle of getting groups of employees together and a lot of advisers would be prepared to go into companies without a fee on this basis. But although a questionnaire can make giving advice easier, it is not a panacea for all evils.”


Exam review now delayed until 2007

The Financial Services Skills Council has revealed further delays in its much anticipated exams review saying the review is now not scheduled to be completed until 2007. Newly-appointed FSSC managing director Teresa Sayers told representatives of the industry and the regulator the review timetable would be published in April, along with the first appropriate exam […]

Zifa MD Reeve set to join Barclays

Jim Reeve, managing director of Zurich IFA Group, has resigned after 25 years with Zurich Financial Services. It is believed that Reeve will soon be taking up a position at Barclays although it is not clear what his role will be and neither Zurich nor Barclays would comment on his move. If he does take […]

MGM maintains bonus rates and cuts MVAs

MGM Assurance is leaving regular bonus rates unchanged on its unitised with-profits policies. The move means bonuses continue at 3 per cent on life funds and 3.5 per cent on pension funds. The company says the move reflects its ongoing commitment as a mutual to with-profits when many other insurers such as Standard Life, Clerical […]

UBS buys London HNW adviser in wealth push

Swiss banking giant UBS is buying London IFA Scott Goodman Harris in the latest stage of its push into the UK wealth management sector. The 15-RI firm will be rebranded under the UBS Wealth Management UK brand. Scott Goodman Harris specialises in pensions and investment advice to high-net-worth individuals and had a turnover of over […]

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What price (more) freedoms?

George Osborne will make his last Budget speech of the current parliamentary term this week, and the early media briefings suggest that pensions will again feature heavily in that statement. So what are we able to learn from the weekend’s coverage?


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