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The Hutton report

Future options for long-term restructure of public sector pensions that will be examined as part of the Hutton review:

  • Career-average defined-benefit schemes that share risk between employer and employee and give members a pension pot after each period of membership, usually a year. Those pots are then revalued until a pension is taken and then are added together to produce and overall pension.
  • Notional DC schemes with added protection that, while not funded, still determine the value of pensions by an assumed return on contributions or annuity rates. Model is used in Sweden.
  • Collective DC schemes, as used in the Netherlands, where contributions are pooled and managed on behalf of the members. Members’ pensions will still vary according to the value of underlying investments but there is an option for inter-generational sharing to smooth out effects of the market.
  • Cash balance schemes where employers put a notional amount into a member’s pot each year, which is then guaranteed. If cash contributions from the employee, employer and investment returns fail to match the notional credit any shortfall is met by the employer.
  • Sequential hybrids (or nursery schemes) with more than one section where a member may earn both a DB and a DC pension during their career with an employer but only one or the other at any one time.
  • Capped DB schemes where there is a limit on the amount of salary which can count toward pension purposes.
  • Combination hybrids where members can simultaneously earn benefits that are part DB and part DC. For example, a capped DB pension, based on earnings up to a certain point and a DC scheme on earnings beyond it.


Post Office could be mutualised

The Post Office could be mutualised under plans being put forward by the Government. The Postal Services Bill, from the Department for Business, Innovation and Skills, proposes powers necessary to transfer ownership from the Government to Post Office stakeholders. Business Secretary Vince Cable says: “I’m concerned that the current structure of the company is holding […]


Nest chief urges pension industry push

National Employment Savings Trust chairman Lawrence Churchill has urged the pension industry to work in partnership with Nest officials to bring about improvements in employer provision. At the National Association of Pension Funds annual conference in Liverpool last week, Churchill said the difficulties of rolling out Nest, which is being scrutinised by DWP officials following […]

Advisers must set a platform policy

Alan Hughes, associate and head of financial services at Foot Anstey Solicitors, and Duncan Parkes compliance manager at Old Mill Financial Services LLP, say adviser firms need to carefully consider how they use platforms and ensure their staff are trained on the firm’s approach.

IMF chief concerned over currency war

The head of the International Monetary Fund Dominique Strauss-Kahn has warned that governments risk a currency war if they use exchange rates to solve domestic problems. Strauss-Kahn’s comments come after the yen fell last week after the Bank of Japan engaged in quantitative easing, which saw it cut its interest rates and propose a new […]

Directors, limited liability partners and auto-enrolment

By Jim Grant, Senior Product Insight & Technical Support Analyst 6 April 2016 brought in changes to employer duties for directors and partners in limited liability partnerships. Here we explain exactly what’s changed. Before 6 April 2016… Directors of limited liability companies where there were no other directors or employees were exempt from the employer […]


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