October 2017

19Oct

The U.K.’s $86 Billion Pension Problem Is About to Solve Itself

For U.K. Plc, the sting of Brexit comes with an unexpected bonus. With no effort on their part, British businesses could see pension deficits that have burdened them for years be practically wiped out if the Bank of England raises interest rates as predicted and they budget for slowing gains in life expectancy, according to estimates of New York-based consultancy Mercer. That will give executives one less thing to worry about as they prepare contingency plans in case Britain can’t...

October 19, 2017
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19Oct

UK. New products needed to defuse pensions time bomb, FCA says

The investment industry has been told by the FCA that it has a growing role in addressing the public policy challenge of inadequate retirement saving levels. FCA chief executive Andrew Bailey said the government and regulators are “showing so much more interest” in the investment industry in part bacuase of recent changes to the retirement market. He said these changes had placed a greater responsibility on individuals to arrange their own long-term savings provision, resulting in investment managers being more directly...

October 19, 2017
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18Oct

UK. OECD tells government to scrap pensions triple lock

The UK government should reform the state pension triple lock in order to afford measures to boost weak growth, the Organisation for Economic Co-operation and Development (OECD) has said. The OECD is the intergovernmental economic organisation of 35 member countries, founded in 1960 to stimulate economic progress and world trade, also recommended the UK increase national insurance contributions for self-employed workers. In its biennial survey of the UK economy released on Tuesday (17 October), the OECD said linking the state pension purely to wage inflation would "be fairer, while it...

October 18, 2017
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17Oct

UK. Pearson agrees deal to insure third of pension scheme risk

Publisher Pearson said on Tuesday it had agreed a deal to insure a third of its pension scheme liabilities totalling 1.2 billion pounds ($1.6 billion) with Legal & General and Aviva. The deal “substantially reduces” the risk that Pearson would be unable to fund future retiree benefits and was agreed at no further cost to the company, it said in a nine-month trading update. Under the so-called ‘buy-in bulk annuity’, the insurers take on some of the risk of the pension...

October 17, 2017
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16Oct

UK. One in five FTSE 100 pension funds at risk of failure in a recession

One in five FTSE 100 ­defined benefit pension schemes would be at risk of failure if Britain entered ­another economic downturn, research reveals. In a “stressed” scenario – such as a recession – the combined pension deficits of the blue-chip index would jump by £100bn, equivalent to four years of pre-tax profits, according to a study by consultants Cardano and Lincoln Pensions. In such a scenario a fifth of FTSE 100 firms would face pension risks worth 30pc or more...

October 16, 2017
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16Oct

UK. Monarch collapse leaves yet another pension fund up in the air

Pensions are the tail wagging the economic dog – sometimes in the strangest ways. Take the high-profile collapse at Monarch Airlines. It’s a sorry story of corporate raiders facing accusations of asset-stripping one of the country’s largest holiday airline businesses and leaving taxpayers to pick up the tab. The once strong, if slightly dated, brand was taken over by private equity financiers to try to make it into another Ryanair. When that failed, it appears the owners could still walk away...

October 16, 2017
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12Oct

UK chancellor: ‘Alive to the risk’ of post-Brexit insurance ‘uncertainties’

UK Chancellor Philip Hammond has said the government was “alive to the risk” that the UK’s withdrawal from the European Union “could in some cases create legal uncertainties as to the status of existing cross-border insurance, pension and other financial services contracts sold under passporting arrangements”. The chancellor’s comments were contained in a letter dated 20 September, which was in response to an earlier written query on the part of Treasury select committee chairperson Nicky Morgan, and which became public...

October 12, 2017
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09Oct

UK. Thousands of families and pensioners at risk of repossession as government scraps crucial mortgage benefit

Thousands of pensioners face potentially losing government help with mortgage payments when the system changes in six months time, an insurance firm has warned. People are being left in the dark over key changes to Support for Mortgage Interest (SMI) due to come into effect in 2018, Royal London claimed. The SMI is currently paid as a benefit direct to a lender to cover interest payments on mortgages, but from April this is replaced by a loan that the firm...

October 9, 2017
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06Oct

UK. Post workers announce 48-hour strike in first national walkout since privatisation

Postal workers will walkout on a 48-hour strike later this month in the first national stoppage since the Royal Mail was privatised four years ago. The strike, involving 111,000 postal workers, will start at 11am on Thursday October 19 in a bitter dispute over pensions, pay and jobs. The strike announcement follows a strike ballot backed by a massive 89% on a turnout of 73% - well above the turnout threshold of 50% set last year by the Tory’s controversial Trade...

October 6, 2017
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04Oct

UK. Royal Mail staff vote to strike over pensions

The Communication Workers Union (CWU) said 73.7% of its 110,000 members cast their votes, with 89% backing a strike. It is the first major vote since the introduction of the Trade Union Act, which requires strike votes to have a 50% turnout. The CWU said the postal executive will meet later this week to determine any potential strike dates. Earlier this year, the Royal Mail announced that it would close its current defined benefit scheme in March 2018. Although the pension...

October 4, 2017
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