View more on these topics

Market welcomes contracting-out moves

Industry figures have welcomed Pickering&#39s proposals for changes to the rules for contracting out which propose a break in the link between contracted out rights and other rights.

Pickering is proposing a simpler evaluation of contracted-out benefits and no requirement to provide limited price indexation or survivors&#39 benefits as a precondition for contracting out.

He wants to liberalise the choice on the types of vehicles and forms of benefit that must be bought with protected rights although his report does not give specific details of exactly what form these chan-ges would take.

His report also proposes removal of the restriction on the date at which contracted-out rights are payable, so that employees would accrue protected rights from day one. This move could push up costs for provision for those who stay in their jobs for over two years but would give better protection to early leavers although some sources warn this could also increase admin costs.

Pickering says: “The separate identification and different treatment given to contracted-out rights compared with other scheme benefits adds considerable complexity to pension schemes. The application of different rules to different periods adds to this complexity. We are, therefore, recommending a pragmatic approach throughout.”

Aegon UK deputy manger (pensions development) Rachel Vahey says: “At the start of the process, we said the acid test for the review would be to find a way of simplifying contracting out. Breaking the link between contracted-out rights and other rights is a step in the right direction.”


ScotEq highlights &#39protection gap&#39

The UK population is exposing itself to a multi-billion-pound “protection gap”, warns Scottish Equitable Protect.Although rising consumer credit figures indicate people have more financial commitments than ever before, only a minority have made any kind of provision against the risk of defaulting on repayments, says the protection specialist.Less than a quarter of the UK&#39s 11 […]

&#3915% of trusts set to pay out nothing&#39

One-third of split-cap investment trusts stand to lose everything or offer only minimal returns, AITC director general Daniel Godfrey told the Treasury select committee last week.Testifying before the committee on the same day as Aberdeen chief executive Martin Gilbert and FSA managing director John Tiner, Godfrey estimated that as many as 20 out of 136 […]

1% cap fears over new plans – Friends Provident

Friends Provident supports Sandler&#39s proposals to introduce a set of simple regulated products but says experience of stakeholder pensions suggests that a 1 per cent cap may restrict the take-up of new stakeholder products.It stresses that consideration should be given to the effect these proposals may have on the availability of independent advice in the […]

Combined bond from West Brom and NU

West Bromwich Building Society and Norwich Union have teamed up to offer a new combined investment and bond portfolio with a fixed rate of 8.50 per cent on investments of £25,000 or over.The rate is fixed until July 31, 2003, with 70 per cent of the bond invested in an NU Portfolio Bond and the […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    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