The ASW workers have lost their case but the advocate general did not seem to think that the pension protection fund is doing an adequate job.
In her concluding remarks, the advocate general Juliane Kokott said: ‘Member states shall ensure the necessary measures are taken to protect the interests of employees and of persons having already left the employer’s undertaking or business at the date of the onset of the employer’s insolvency in respect of the rights conferring on them immediate or prospective entitlement to old age benefits.’
The advocate general’s opinion is not binding on the ECJ but lawyers are having a field-day amongst themselves, debating as to whether the PPF will have to be strengthened as a result of these remarks.
Aviva chief executive Richard Harvey has been at pains this week to point out that the acquisition of AmerUs, the life assurance giant was not merely a substitute for failing to acquire Prudential. Aviva confirmed its 1.6bn takeover of AmerUs last week, an acquisition that will place the name Aviva in every state of the USA.
Whatever the reasons for buying AmerUs, it is clear Aviva ambitions now lie outside the UK market. The group now says it will not be a consolidater in the UK, signalling its growing enthusiasm for the USA and Asia.
Another big deal that was confirmed last month was the purchase of Abbey’s life insurance business by Resolution. Resolution is now hoping to raise 1.55bn through a rights issue to fund its 3.6bn acquisition. It fixed the rights issue share price at 480p a share on Monday, the middle of the 440p to 520p range unveiled when the deal was announced in June.
The ASP debate continues to gather momentum following comments in the House of Commons last week that appeared to strongly discourage the use of the product other than for religious reasons. Hargreaves Lansdown has launched a petition – ‘I should not be forced to buy an annuity with my pension fund at age of 75’ – and has thus far gained 626 signatures. Coincidentally, a report from the Department for Work and Pensions – Public Attitudes to personal accounts: Report of a Qualitative Study – found respondents aghast when introduced to the concept of an annuity.
In the same report, some interesting issues came out of the qualitative responses towards personal accounts. In the chapter on communication, the report says: ‘Some participants believed that face-to-face briefings about personal accounts would be useful, although it was realised that this may be unrealistic due to time and the expense of these. Despite this, it was felt that the need to have questions answered is important for anyone thinking about joining the scheme and that there may be a role for employers to play here.’
The report was released the day the consultation on the model for personal accounts proposed in the recent white paper on pension reform was officially launched at a London summit. The pensions reform minister James Purnell commented, after the press was unceremoniously escorted from the summit, there is still a long way to go and there are still many unanswered questions on personal accounts. Indeed, the DWP’s report highlights just that.