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Confusion as FSA says PPPs could beat OPPs

IFAs are calling for FSA guidance on how to assess the value of final-salary schemes, warning that risks to defined-benefit schemes have increased significantly.

They also argue that the surge in the winding-up of final-salary schemes means that many consumers caught up in the pension misselling scandal are better off having transferred out of an occupational scheme even before they received compensation under the review.

The FSA says it is for IFAs to decide. FSA spokeswoman Louise Buckley says: “IFAs have to take everything into account, including current market conditions. Nothing is guaranteed any more and a personal pension may be more appropriate than an occupational scheme.”

The extent of the threat to final-salary schemes was highlighted last week by a report from actuaries Watson Wyatt that showed a £70bn shortfall across UK company schemes.

IFAs are also hitting back at Consumers&#39 Association suggestions that stockmarket falls mean pension review compensation was not high enough.

Richard Jacobs Pension & Trustee Services director Richard Jacobs says: “A &#39Rolls-Royce&#39 scheme is no longer a &#39Rolls-Royce&#39 scheme. The FSA will not give us any guidance but will put me out of business if I give the wrong guidance.”

Informed Choice managing director Nick Bamford says: “This is a Pandora&#39s box. If you were an IFA who had paid out a massive amount to someone who was now better off, you would want some money back. Do we now say everything we have done on the pension review for the last 10 years must be revisited?”


Mortgages plc appoints two new sales managers

Specialist lender Mortgages plc has appointed two senior sales people as part of the restructure of its sales and marketing team. Mark Harrison and Bryn Hancock take up the new positions of regional managers for the north and south of the UK respectively. Harrison joins from Bank of Ireland where he was corporate lending manager […]

NU says increased awareness has boosted equity release

Norwich Union increased its equity-release business by a third in the first half of this year as elderly homeowners unlocked £313m from their homes. The figures, compiled by Safe Home Income Plans, compare with £235m released in the first six months of 2001. NU lent £218m in mortgage schemes and £95m in the newer reversion-based […]

Niznik set for Standard fund spanning small firms to mid caps

Standard Life Investments is launching a fund in November that will invest in FTSE 250 and UK smaller-cap companies under the stewardship of former Invesco Perpetual manager Mark Niznik. The fund, which will be the first to be managed by investment director Niznik following his move to Standard in April, will invest in companies from […]

ABI reviews life cover for people with HIV

Life insurance for people with HIV could become available as part of a wide-ranging consultation by the ABI on how insurance companies deal with the condition. The ABI is revising its current code of practice for life insurance and critical-illness cover on HIV and is set to launch a wide-ranging consultation later this year. The […]


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