At the last budget, the Chancellor introduced significant changes limiting tax relief on pension scheme contributions for those with ‘relevant’ earnings over £150,000pa, tapering down to 20% for those with earnings over £180,000pa (i.e. the same as basic rate tax payers).
The changes are to be effective from 2011. However, the Chancellor has introduced a new special annual allowance test to prevent excessive contributions in the interim.
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In a recent article John Healey, Minister for Local Government suggested that the local government pension funding black hole was a myth and that these schemes would not cost tax payers more.
I wonder where he thinks the money will come from? Maybe quantitative easing has actually made him think that money can be made out of thin air.
Or maybe he thinks the expenditure can just be claimed for on expenses!!
I have tried a few times recently to explain how actuaries in the UK are governed and regulated. More complicated than you might think!
In a nutshell the Financial Reporting Council (FRC) is the UK’s independent regulator responsible for promoting confidence in corporate governance and reporting. The FRC sets standards for actuarial practice and oversees the regulatory activities of The Actuarial Profession (I will explain later who they are). Read more »
Thought it was interesting that Credit Suisse, an investment bank, is involved in the Babcock longevity swap. Given the sectors performance in relation to collateralised debt instruments (synthetic or otherwise) and credit default swaps (and you would think a bank might understand the risks associated with debt and credit default!) how confident are we that they understand the risks associated with longevity? (not an area banks have claimed expertise in the past). No doubt they have very sophisticated financial models in place and everybody understands the detail behind the contract…… Read more »
Pinsent Masons have garnered a bit of press recently for their survey re the intentions of currently open final salary schemes to close or not. The accompanying headline was “Survey shows “death” of final salary schemes premature” and mentioned that out of 200 schemes surveyed none were planning to close.
This is very much at odds with my experience of schemes, admittedly in the SME Sector. It did find that a large percentage of schemes were tinkering with accrual or contribution rates or flirting with CARE schemes, or rearranging the deckchairs on the Titanic as I think it should be known. None of those putative solutions really addresses the fundamental risks associated with Defined Benefit schemes. I have seen a number of companies who had tried such solutions eventually come to us to help them close their scheme as the tinkering hadn’t helped. Such solutions are clearly in the interests of consultancies with large numbers of actuaries and other professional staff to keep gainfully employed but are they in their clients interests? Read more »
Spence & Partners Limited, who are fast building a reputation as a dynamic and progressive force in the actuarial and pension consulting market in Scotland and Northern Ireland, have managed to secure the services of Ian Campbell, BSc, FFA, a senior actuary with decades of experience at the highest level of the profession.
His appointment as director responsible for actuarial services enhances the strength, gravitas and professional integrity of the Spence & Partners team which, under Managing Director Brian Spence, has built up an unrivalled reputation in a fiercely competitive sector. Read more »
I see the Irish Government has launched a range of measures to help employees of companies who become insolvent. Similar objectives to the PPF in the UK but the PIPS scheme seems to have come up with a slightly different solution with the Irish Exchequer taking on responsibility for paying pensions in exchange for a payment from scheme trustees with any savings over the cost of annuities used to reduce pension shortfalls for other members. Should produce some short term revenue for the beleaguered Irish Exchequer but only in exchange from some potentially toxic long term liabilities. Better or worse than the PPF – it’ll be a long time before we know!!
MacMillan Cancer Support receive £750 from Liz Fergusson
Spence & Partners are pleased to support Macmillan Cancer Support with a donation of £750. The money was raised by donating the funds that would have been used to buy Christmas Cards. Instead, Spence & Partners’ clients received a festive and environmentally friendly e-greeting and staff were asked to select a charity they wished to support.
Liz Fergusson (pictured) presented the cheque to Emma Rae from the charity at the Spence & Partners Belfast office commenting that “Sending an electronic Christmas greeting gave us a great opportunity to demonstrate how a small change can make a significant difference to a charity we are delighted to support”.
Apparently a 15 year old whizzkid from Germany has corrected NASA scientists on the probability of an asteroid called Apophis hitting earth. While NASA estimated a 1 in 45,000 chance, Nico Marquardt suggested 1 in 45, which NASA ultimately concluded to be right. Read more »
In these difficult times many employers operating final salary pension schemes are closing their scheme to future accrual of benefits.
Some lawyers and actuaries have expounded a theory that suggests that since this brings the eventual wind-up closer (albeit it may still be decades away) the trustees should adopt a buy-out funding target. Read more »