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Delay to FRS17 &#39is not reprieve for final salary&#39

MX Financial Solutions is warning that the postponed implementation of accounting standard FRS17 will only ease the pressure on occupational pensions and not remove it.

Full adoption of the controversial accounting rule, which requires companies to include pension liabilities on their balance sheets, has been delayed until 2005.

MX Financial fears this will not stop the closure of defined-benefit pensions as FRS17 has raised awareness of the threat posed by such schemes.

The accounting rule could be superseded by a new worldwide standard to be introduced by the International Accounting Standards Board next year.

MX Financial believes that companies already facing increased business pressures will decide that they can do without the additional risks involved in defined-benefit pensions.

It says poor investment returns in recent years are adding to the pressure on defined-benefit schemes, meaning that companies can no longer take contribution holidays. Many have had to write big cheques to top up their schemes.

MX Financial has produced a guide for companies entitled, Reviewing Your Company Pension, that covers the issues and provides a glossary of pension terminology from the Plain English Campaign.

Head of corporate marketing Jim Aitken says: “Moves towards defined-contribution schemes were already under way before the advent of FRS17. A number of factors converged to accelerate the trend including the Pensions Act, dividend tax credit changes and the minimum funding requirements.”


NDF Administration brings out income & growth bond

NDF Administration has established the income and growth plan, a guaranteed equity bond that is linked to the FTSE100 index for three years and two months.The plan, which is also available as an Isa or Pep transfer, offers investors a choice of 9 per cent income a year, 0.7 per cent income a month or […]

Sandler could help more IFAs keep independence

Ron Sandler&#39s proposals for the future of the independent sector have been met with gratitude from IFAs who have concluded he has made it easier for advisers to remain independent. Sandler&#39s report published this week proposes a “substantial relaxation” of the FSA&#39s Defined Payment System by removing providers from influencing how much and how IFAs […]

Simpler products &#39give more motivation to save&#39

The Government should no longer rely on tax incentives to motivate people to save as there is little evidence they have been successful in increasing the overall level of saving says Ron Sandler.While not going so far as to suggest the Government should scrap exisiting tax incentives such as Isas, which would cause too much […]

IFA investment knowledge to be increased

Financial advisers will have to beef up their investment knowledge following Sandler&#39s recommendations, with the review team concluding IFAs are lacking in this area.The report does not go into specifics in this matter, with Sandler saying details will be up to the FSA to sort out. He says the FSA&#39s current examination of the review […]

Craig Inches – thoughts on how to preserve capital and generate income in an inflationary environment

In this short video, Craig Inches, head of short rates and cash at Royal London Asset Management, offers his thoughts on how to preserve capital and generate income in an inflationary environment. Watch the video in full The value of investments and the income from them is not guaranteed and may go down as well […]


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