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AVCs could lose out to fat cats in Bill change

A Pensions Bill amendment could see people who have made additional voluntary contributions lose their money to fat-cat directors, warns an occupational pension consultancy.

The amendment, made by the House of Lords last week, will overturn the current situation where money invested through AVCs is the first to be ringfenced on scheme wind-up.

First Actuarial director Alan Smith says the situation would be most likely to arise when a scheme is ref-erred to the pension protection fund but has, including these AVC funds, just enough assets to cover its PPF liabilities.

Smith says the position regarding money-purchase AVC schemes is unclear as these could also be at risk from the amendment.

He says: “Women really are likely to lose the most and Turner has pointed out that women are signific-antly poorer that their male counterparts in retirement.

“Imagine how pleased a female employee would be to see her hard-earned savings go towards a pension of £75,000 a year which is already in payment to a retired director.”


NDF Administration – Growth Plan October 2004

Type: Capital-protected bond Aim: Growth linked to the performance of the FTSE 100 index Minimum-maximum investment:£10,000-£1m, Isa £3,000-£7,000 Term: Six years Return: 8 per cent of original investment at end of year one if index is at or above initial value, 16 per cent at end of year two, 24% at end of year three, […]

Julian Gibbs

The Threadneedle UK Limited Issue fund, now called the UK Accelerando fund because it is also being marketed in Europe, was launched in May 2003. Since then, the share price has risen by 31.6 per cent versus the rise in the FTSE All Share index of only 17.9 per cent to August 31, 2004. This […]

A tough Act to follow

A change to a Government minister with a pensions brief is a significant event for our industry. Sometimes there is a collective sigh of relief, such as when Helen Liddell moved on after earning a reputation as the scourge of the industry by naming and shaming companies she thought were dragging their heels over the […]

NU launches new tranche of guaranteed growth plan

Norwich Union is to launch a second tranche of its guaranteed growth plan. The plan guarantees a minimum return of 20 per cent regardless of what happens to the FTSE 100. It is a six year single premium product and will be available for six weeks from November 1st. It can be held as a […]


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