Posts by David

David Davison

David Davison

Specialist consultant on pensions strategy for corporate, public sector and not for profit employers
David Davison

There has been much written recently about the potential pitfalls of so called ‘inducement exercises.’ Whilst some of the concerns are valid I believe that provided those participating take the time to understand the recent regulatory guidance and the roles of various parties in the process then the risks are lower and more manageable than they might appear at first glance.  Read more »

David Davison

There has been a huge amount of what I can only describe as ‘hype’ in the popular press and financial magazines over recent months, almost wholly negative, about the practice of employers topping up final salary scheme transfer values to allow members to exercise a real choice in relation to their pension benefits.   I wouldn’t wish to suggest that reporting on this matter approaches the worst excesses of the fourth estate (“Freddie Starr ate my Hamster” or “London bus found on Moon” for example) but headlines such as “Bribes offered to quit final salary schemes”1 and “Regulator launches probe into growing ‘cash for company pensions’ scandal”2 certainly leave scope for a more considered and balanced assessment of the issues. Read more »

David Davison

There’s been a lot of press comment recently about companies offering staff what have been called ‘sweeteners’ to give up all or part of the final salary promise from their pension scheme.

Given the extent of the final salary pension problem, its potential impact on business and the likely timescale over which scheme deficits now need to be addressed I think that it’s hardly surprising that companies are seeking solutions which help them to manage their final salary liabilities more proactively. Read more »

David Davison

From next month, most members of final salary pension schemes will be able to sleep that bit more peacefully, secure in the knowledge that new legislation will significantly improve the level of protection their benefits receive. Yet one particular section of the public – the spouses of pension scheme members in the midst of divorce proceedings – will miss out on any benefits from these changes.

The most common method of dividing assets is for the party with the most pension (often the husband) to retain it with the other party (often the wife) receiving a higher proportion of the other assets to compensate. This seems like a sensible and pragmatic approach for many divorcing couples. Read more »

David Davison

From April 2005, most members of final salary schemes, and their families, will be able to sleep that bit more peacefully at night, secure in the knowledge that the level of protection from their pension benefits has increased substantially.

That comforting blanket of security comes courtesy of a couple of legislative changes: recently passed legislation making it more difficult for solvent employers to rid themselves of their final salary pension schemes without securing the full entitlement of members, and the introduction of the Pension Protection Fund which will provide a high degree of protection should employers become insolvent. Read more »

David Davison

Delaying decision-making to a later date is something that most company directors have probably spent much of their working lives battling against but, nevertheless, as the end of their own careers approach, it may be in many senior executives’ best interests to embrace this alien strategy, at least insofar as their pension arrangements are concerned.

Company directors and senior employees who are due to take benefits, or who opt to defer drawing any planned pension benefits until, after April 2006 could reap a financial reward as a result of the Governments pensions simplification legislation. Read more »

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