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Another bidder pulls out of personal accounts admin race

The Personal Accounts Delivery Authority has confirmed that Logica UK has withdrawn from the competitive dialogue process for the contract to administer personal accounts.

Logica was bidding as a consortium which included International Financial Data Services and DST Systems.

Chief executive Tim Jones says: “We wish to thank Logica and its key sub-contractors for their engagement with us.

“They are impressive organisations. We enjoyed working with them and have benefited from their input throughout the dialogue process.

“This is a complex procurement and it is not unusual for bidders to re-assess their position as competitive dialogue continues.

“The process with other bidders is proceeding well and we are very confident we will have a strong competition for the final contract.”

Money Marketing reported in October that Danish admin provider Arbejdsmarkedet Tillaegspension or ATP had withdrawn from the running for the contract to administer the scheme.

Pada said the firm decided that providing services for the scheme did not “fit with its commercial model”.

Only Tata Consultancy Services and a team including Great West Retirement Services and Canada Life remain in the running. A winning bidder is expected to be selected by next summer.

A Logica spokeswoman says: “Following an extensive review, Logica and IFDS have taken the decision to withdraw from the Pada procurement process. The reasons for this are confidential.

“Logica and IFDS have enjoyed a highly productive competitive dialogue and withdraw from the bid on very good terms with Pada. Logica and IFDS wish Pada every success in its ongoing bid process.”


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There are 15 comments at the moment, we would love to hear your opinion too.

  1. Personal Accounts are Doomed. The Tories will wish to place their own stamp on pensions reform when they enter government. The methods adopted for design and delivery of PA’s as they stand are re-inventing the wheels of design and delivery systems already in place which are perfectly capable of doing the job of collecting and allocating compulsory contributions

  2. For goodness sake, just use the NI system. It will save millions both in the creation of a new system and massive costs to small businesses trying to cope with the crazy new admin processes.
    DWP argument is that it takes c 18 months to identify NI payments before they can be distributed. Easy to solve – just invest block funds on PA default fund then distribute.
    This system also allows true portibility of continued investment in one vehicle.

  3. Why is it that Labour is seen to be hellbent on reinventing the wheel on so many different areas of financial planning. Since 1997 when they came into par we have seen an explosion in personal indebtedness and a lack of personal savings. Compulsory contributions to pensions is a very good idea but existing pension arrangements could be easily modified to deal with compulsory contributions. It is no wonder that people have lost faith and pensions when governments continue to mess about legislation and make it more complicated for people to understand. The simple fact is that if you wish to retire on £20,000 in today’s money you need lifetime savings of around £400,000 in today’s terms surely this is the message that we need to be delivering to the general public.

  4. Only two companies left in the running, somebody should tell them to save their money and get out of the running now.

    The scheme is doomed to fail, how embarrassing if they govt. launch PAs with no one to adminster the scheme, perhaps somebody should have asked why no UK based pension provider wants to get involved.

  5. Personal Accounts doomed? Isn’t practically everything proposed by this government dooomed? Remember Stakeholder Accounts? Remember Pension Simplification? Remember the days when you could depend upon at least some or what was said by the govenment?

  6. Peter Herd’s comment about the size of fund needed to deliver an income of £20,000 p.a. is right on the nail ~ except for the fact that most people, upon seeing such a figure as £400,000 will recoil in horror and despair. After all, £400,000 is considerably more than most people pay for the most expensive house they’ll ever manage to buy.

    So what hope of persuading them to embark on trying to accumulate a retirement fund of £400,000 (on top of buying their home, because we all know everyone needs to start early on in life)? Precious little, I suggest.

    But ~ if the annuity trap was consigned to history and replaced with a Pension Income Bond, the amount of fund needed to provide an income of £20,000 p.a., regardless of age, would fall significantly. Add to that inheritability (tax free) of unspent funds (into a PP or two for the next generation), restore (improved) Waiver of Premium cover and allow life cover through a PP (subject to a minimum level of contributions to retirement benefits being maintained), repeal the tax on dividend income and, hey, we might just have something we could present to clients as such a good deal that there’d be no need for coercion (sorry, compulsion).

    AND, there’d no longer be any need for all loony-tune third way, niche retirement income products or Income DrawDown, or USP or ASP or any of the other crap we have to try to navigate now.

    Who needs Personal Accounts? What we really need is for the present framework to be completely dismantled and put back together properly without all the bad things we have now.

    But what chance of this government managing to figure out anything like that?

  7. Personal Accounts are massively flawed – but so is the government that came up with this (regurgitated) idea.

    What we need is a decent State pension for everyone – god knows we pay in enough tax over a lifetime of work to expect as much. Instead, this government leaves the less fortunate pensioner cold and hungry. milks the more fortunate pensioner until the day he dies and then taxes his estate.

    Still, pensioners do receive cold weather payments – don’t know if they’ll continue once global warming takes effect.

  8. Right, so the Personal Accounts bid is left with 2 foreign companies. Bet they understand the pension well and wont make a mess of it. Why dont we just wait for the EU to come up with an alternative idea? Oh no, that prob the next procurement.

  9. Will PAs be as successful as CAT standard and Stakeholder?

  10. I understand that the govt plans to borrow substantially to fund the setting up cost of the Personal Accounts, which will have a break-even over 20 + years. Seems highly similar to a Personal Pension, with upfront comission! And thst’s assuming the costings go to plan.
    Me thinks Logica don’t think it’s gonna happen. We do need some compulsion, but this particular proposal is flawed, as lots of beople would loose out on means tested benefits.

    Millions more may loose out as they ‘wait and see’, loosing valuable time, which my friends, cannot be recouped.
    Hope they consult a good IFA next time.

  11. No need for PA’s, use the existing system – why watse yet more taxpayers cash on something that already exists and works?

    Try this idea – everyone under, say, 25 now has compulsary into a PP of 10% personally (I don’t subscribe to “can’t afford it”, take from first pay packet and they can’t miss what they never had). This will put a time-bar on the whole situation.

    Increase the basic state to around £250pw, remove pension credit/means testing (barriers to saving) but get rid of all state pensions/winter fuel/single Council tax rebates/free bus/Free NHS prescriptions, etc, etc to those over 65 with, say, £60k+ pa income to help pay for it.

    This will also save billions currently spent on the admistration of all these areas..

  12. To have two left feels like a spaghetti western. This gives PADA even less clout in negotiation and therefore PAs have an even greater struggle to be a success

  13. How about a rethink of the entire long term saving regime.

    BOGOF add 50% to what is saved in a new vehicle with a 50% paid back on any withdrawal before age 60. ( Basicall simple savings which say for every £1 saved i get a £1 from the tax man. If i spend it early i give the tax man back his £1.
    at age 60 chane it to you pay 1/4 back (25% income tax ) and reduce this to 12.5% ( at age 70)

    On death the beneficiaries get 50% of the fund i.e. give back the government free bit in the fund.

    And as for options why not have options at 60/70 for annuities with a Long Term Care insurance option ( doubles your annuity but priced like escalation option).

    This would be a saving regime that is simple gets all the tax avoidance and bean counters out of the cost loop. Strangely the public would understand it easy as well.

    Let people invest in what they want fotr their own long term benefits.

  14. Richard Brown, Managing Director, Moneynotion Limi 11th November 2009 at 6:46 pm

    Personal accounts, like Stakeholder pensions are a dead loss.

    How many group Stakeholder schemes have we all set up, which have never had a single member?

    What a waste of everyone’s time and money!

  15. TATA !!! that’s about right.

    Indian company that aquired Jaguar then asked for the british government to bail them out with Loans.

    There is already very little confidence in the use of overseas companies by insurers and credit card companies etc.

    The control of data, reported selling of data, and opportunities for fraud that this creates is ridiculous we already have well documented problems.

    And what will this brainless government do? give them everyones NI Number and company bank details.

    Don’t be surprised to see TATA get this with an under the counter subsidy from the UK tax payer.

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