View more on these topics

Baring calls for shift to fully funded schemes

Baring Asset Management is proposing the creation of a fully funded public sector pensions system to cover civil servants, the NHS, teachers and the armed forces.

It would be based on successful schemes such as the Dutch public sector workers’ scheme ABP and the California public employees scheme Calpers.

Barings director of fixed income Toby Nangle believes that Gordon Brown, as Prime Minister, has the opportunity to move public occupational pension schemes to a fully funded basis when the Whole Government Accounts project comes to fruition later this year.

Nangle has produced a white paper called Solving the UK’s Pension Problem to show how the Government could reduce the cost of pension provision to the public and remove the UK yield-curve distortion.

He proposes a system along the lines of ABP or Calpers – the Californian public employee retirement scheme – and says the fully funded institutions would be scheme-specific.

Nangle says over £600bn of unfunded public sector occupational pension deficits will effectively be brought on-balance sheet later this year as part of the move towards Whole Government Accounts.

Nangle says: “This move could remove the UK yield curve distortion, providing relief to the private sector, and potentially enabling them to halt the tide of defined-benefit scheme closures. At present, only local authorities and MPs benefit from fully funded pension schemes. Rolling this out across the public sector would be a bold move of similar magnitude to the granting of independence to the Bank of England 10 years ago.”

Richard Jacobs Pension & Trustees Services managing director Richard Jacobs says: “It is a fantastic idea and a great opportunity but Brown is not going to do it because it is not his idea. These schemes are costing the tax-payer a fortune and all credit to Barings for coming up with this solution.”

Recommended

JP Morgan launches JPM flexible bond fund

JPMorgan Asset Management has launched a JPM Flexible Bond Fund which it claims has the flexibility to maximise returns during all market environments.JPMAM says that unlike most other European bond funds, JPM Flexible Bond Fund is able to invest in all fixed income securities in order to take advantage of the best opportunities in global […]

Nicola Horlick

Bramdean Asset Management’s chief executive has been on the road around the UK giving advisers details of her new venture into alternative investment and its aim to open up private equity and hedge funds to the mass affluent. She also has plans to set up a wealth management service for women in the Middle East. Interview by Gregor Watt.

Borrowers in a fix

Tanya Powley writes on the dilemmas facing homeowners coming off attractive two-year fixed rates.

Alert on power of attorney

Advisers should act quickly to protect family clients before the rules on enduring power of attorney change from October 15, warns Shropshire IFA Pi Financial Dixon Sutcliffe & Co.The company says the new rules will make the process far more complicated and expensive.Enduring power of attorney will be replaced by two types of lasting power […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com