View more on these topics

Plans for protection and a new regulator

Details of the pension protection fund, a new pension regulator and simplification of occupational schemes were unveiled with the publication of the Pensions Bill last week.

The bill also replaces the minimum funding requirement with a scheme-specific app-roach which the industry says will free up schemes to adopt an investment strategy that matches liabilities with assets.

The bill makes it clear that the protection fund will not be backed by the Government and will be able to reduce liabilities if funding levels are low. The fund is set to start in 2005 and the exact level of security is yet to be determined, with contributions not expected to be risk-related in the first year.

The new pensions watchdog, to be called The Pensions Regulator, first proposed in the Pickering report in July 2002, will replace Opra, with all staff transferring to the new body.

The regulator will adopt a light-touch approach, focusing on fraud and maladministration, and will have tough new powers on underfunding.

The bill says contracting out will be simplified although no details are given of how this will be done.

Secretary of State for Work and Pensions Andrew Smith says: “Where companies with underfunded pensions have gone bust, workers have found themselves severely short-changed on the pension they were expecting.

“With the pension protection fund, people in pension schemes can be much surer that they will get the pension they were promised.”

Confederation of British Industry chairman Richard Greenhalgh says: “Companies want to see the fund taking into account the risk of company insolvency as well as underfunding, otherwise, we will be in the unacceptable position of well managed funds effectively underwriting other schemes.”

Recommended

Alexander Hall founder starts loan firm

No-fee mortgage broker Alexander Hall founder Simon Nimmo is setting up new high-net-worth mortgage brokerage Charles Cameron. Nimmo has seven brokers on board already and is looking for around 20 by the end of the year for the firm, which is set to launch in April. He says he wants Charles Cameron to remain small […]

McFall has wrong perception of endowments

In the recent news item about the Treasury select committee, John McFall huffs and puffs about endowment policies (Money Marketing, February 5). He seems to link the shortfall on endowment performance with sales commission paid. His ignorance of fundamentals is amazing. However, he is a career politician, not an insurance and investment industry specialist, and […]

Payouts fall by 6% at Friends

Friends Provident is cutting payouts on with-profits policies by an average of 6 per cent despite the fund showing growth for the first time in three years. A 65-year-old male paying £200 a month into a conventional with-profits personal pension over 20 years will receive £127,273, down from £146,373 in August last year. A male […]

Man Investments – Man RMF Multi-Style

Type: Capital protected hedge fund portfolio Aim: Growth by investing in hedge funds and managed futures Minimum investment: Lump sum $ 50,000, euros 50,000 Place of registration: Bermuda Investment split: 50% managed futures, 23% relative value, 13% event driven, 7% equity hedged, 7% global macro Guarantee: 100% of capital returned regardless of performance of underlying […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment