View more on these topics

Paternoster survey shows falling cost of pension scheme buyouts

Paternoster says the cost of buying out pension liabilities for UK companies has reduced significantly over the past 18 months.

The firm, which takes responsibility for the risks associated with companies’ finalsalary and defined-benefit pension schemes, has revealed the findings of pricing analysis which shows that the cost of buying out pension liabilities has fallen.

Key findings indicate that since January 2006 the cost to buy out pensioners has reduced by 6.5 per cent and the cost to buy out deferred scheme members has reduced by over 11 per cent.

Paternoster chief executive Mark Wood says: “This cost reduction is predominantly due to the increased yields on bonds invested as the cost of providing a given level of pension falls as yields rise.

“There is a danger that only with the benefit of hindsight will trustee boards and their advisers see they may have missed an opportunity to secure their defined-benefit pension promise by buying out schemes as deficits close. Additionally, prices are being influenced by increased competition in the marketplace.

“These price savings can only be positive for trustees looking to secure the benefits promised to their pension scheme beneficiaries.”

Recommended

Departures hit Ashley Law

Two disgruntled Ashley Law members have quit the firm, with one accusing directors of having “ridden roughshod” over his business.Gary Taylor, of Ashley Law Maesteg in Wales, claims he was left with no choice but to leave the firm after it decided to switch back-office systems.Taylor says he was not consulted. He claims the new […]

Court says FOS must keep to 100k limit

The High Court has ruled that the Financial Ombudsman Service does not have the power to make binding “directional” awards requiring redress payment of over 100,000.The FOS has the power to make two types of binding awards, a monetary award capped at 100,000 and a directional award, in which a firm takes such steps as […]

Basket weave

Meteor Asset Management, headed by the very bright Graham Devile, has produced two excellent capital-protected plans linked to commodities. One is the Meteor galaxy protected commodities plan and the other is a similar plan based in dollars.The UK plan pays out 160 per cent of any growth in the commodity basket with 100 per cent […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment