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Amex suspends stakeholder payments

American Express has taken the unusual step of suspending company contributions to its UK stakeholder pension plan for up to 18 months.

As revealed in this week’s Money Marketing, the firm says it suspended contributions from July 1 to maintain profitability in the economic environment and will lift the suspension no later than January 1, 2011. Amex says it will keep staff informed about its readiness to lift the suspension before 2011 if economic and business circumstances change. A spokeswoman says contributions are unlikely to be backdated when they are resumed.

Before the suspension, Amex made a core contribution of 3 per cent to employee stakeholder pensions and would match contributions to a maximum of 6 per cent. The firm has around 6,000 employees in the UK but would not disclose the number of staff in its pension programme.

Hargreaves Lansdown head of pensions research Tom McPhail says: “Cutting the pension contributions can buy you a bit of breathing space but the price paid is that your employees are going to have to work later into retirement or they are going to have to retire on less income.”

Richard Jacobs Pension & Trustee Services managing director Richard Jacobs says: “It is very worrying that Amex is doing this on a stakeholder pension. It would not surprise me if when it comes to reintroducing contributions they decide to stop the stakeholder plan and run with personal accounts at a lower rate.”


IMF upgrades Japan forecast

The International Monetary Fund (IMF) has upgraded its growth forecast for Japan for 2010 from 0.5% to 1.7%.In its annual assessment, the IMF said it expects Japan’s economy to contract by 6% in 2009 and warned of the need for further measures should the outlook deteriorate.Adjustments in production and the Japanese authorities’ strong fiscal response […]

Low points

Interest rates have been the centre of many investment discussions in the past year. With the Bank of England deciding to hold interest rates at their historically low level of 0.5 per cent, it appears that this topic is not likely to go away any time soon.


Britain's “Forgotten Army”: The collapse in self-employed pension membership – and what to do about it

Pension scheme membership among employees has risen by more than five million in the past four years because of the policy of automatic enrolment into workplace pensions. But Britain’s army of 4.4 million self-employed people, who account for one in seven of the workforce, are not covered by automatic enrolment. Pension coverage among the self-employed […]


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