Just a shameless plug actually for a Zen themed Breakfast Seminar at which I, together with an Actuary and an Investment Manager will give some insights on how to get the best out of your pension advisors.

The Seminar will be held at the offices of GAM, 20 King Street, London SW1Y 6QY on 24th March 2011 from 8am to 10am. It is by invitation only so if you’ld like to come along, for some good food (including sushi – yes, it really is Zen!!) and 3 fascinating speakers, then please contact me. Details are over there by my picture!! Places are limited but it would be great to have some of my blog readers there! So if you are a Trustee of a Scheme or a Corporate Sponsor and would like to know more just get in touch.

A few thoughts on tPR this week and it’s decision to reject the Recovery Plan put forward by Uniq and the scheme Trustees. The proposal in and of itself was not really that remarkable. But clearly tPR saw something in it that they didn’t like – probably the 3 year contibution holiday – and told them to go back to the drawing board. Uniq are now saying that they will have to raise more capital in order to pay off the £400m plus deficit. Not easy when you’re only making £4m pa profit. The difficulty in all this is that since the pension scheme is the firms’ largest creditor, any equity/debt swap deal, (which is almost the only thing left on the table) will mean the trustees potentially commiting a criminal offence in that this will breach the rules on self investment. The law limits trustees to no more that a 5% stake in the Principal Employer’s business. The prosecutor for those offences would be …yup, you guessed it…tPR!!

Now I don’t know for certain that tPR would have been aware of this little conundrum when they rejected the original deal. But if they weren’t then frankly they should have been or at least they should have reasonably forseen the possibility. Discussions between the company, the Trustees and tPR would have been pretty detailed and wide ranging. Were they blinkered by their statutory duty to protect the PPF and completely took their eye off the ball when it came to self investment? Perhaps but if so, they’ll never admit it and we’re never likely to know. Where’s Wikileaks when you really need it??

In other pension news, the Parliamentary Ombudsman has weighed in with her views on the latest development in the Equitable Life saga. It seems that the Chadwick Report has fallen somewhat short in the level of compensation that is being paid to policyholders who were affected by the Guaranteed Annuity Rate saga of the early ‘Noughties’. Despite £4.8 bn being lost, only £500m is being put up. Ann Abrahams had issued her own report in 2008 blaming significant regulatory failures in the debacle but now says that the Chadwick report is flawed due to it’s terms of reference being ‘irrelevant’. Well, I don’t know about that but I sincerely hope that this will now be brought to a swift conclusion. The Bloody Sunday enquiry took over 30 years…if this goes the same way, then most of the potential claimants will indeed be beyond caring.

And finally, it seems that Astra Zeneca is following the BBC Pension Scheme in trying to limit the amount of salary increases which will count towards Final Pensionable Salary. Entirely predictably, the Unions are threatening strike action. Word to the wise here folks – be grateful that you still have a Final Salary pension of any sort. Going on strike will hardly improve the financial position of your employer who might well be struggling to keep the businees (and your jobs) going in the light of statutory funding requirements. Just remember the potential alternative (Clue: birds lay eggs in them!!)

I have had some cause recently to consider the position of those fortunate enough to be earning £150,000 or more.

After putting aside all thoughts of jealousy, it began to occur to me that maybe there are some downsides to having very large…er…assets!

The Government has of course already announced a new 50% tax rate for high earners, heralding the departure from these shores of various D list celebrities for which my sympathy rating is Zero

However, recent research by yours truly – OK in reality consisting of me chatting to several very knowledgable consultants at the recent excellent Professional Pensions Show – has revealed that there are already some very highly inventive ways to allow high earners to limit payment of what to many seems a punitive rate of tax.

A great deal of talent which is of significant benefit to UK PLC and, for the more venal amongst us, tax is likely to be lost to the Treasury by those individuals ‘offshoring’ in some way. And its not only the rate of tax that’s an issue. Couple that with a gradual reduction in Personal Allowances for those with taxable incomes of £100,000 or more from April 2010 and you have for some, a marginal tax rate of 60%. No wonder foreign climes seem attractive and not just for footballers and their WAGS.

But for those who choose (or have) to stay, what options exist for them to make the most of their income? A few years ago, when pension contributions were subject to the statutory Earnings Cap, many high earners were offered membership of ‘top up’ arrangements by their employers.

These EFRBS (Employer Financed Retirement Benefit Schemes) were unapproved by the Revenue of the time. Being unapproved, they were of course outside the Cap Limits. Obviously, there was no tax relief on contributions going in, but neverthelss they provided an attractive option.

When the Earnings Cap was removed under the 2006 ‘A Day’ tax simplifications, use of these EFRBS largely fell out of favour for those high earners who were nonetheless still within the Lifetime Allowance Limits or who had claimed certain ‘protections’.

But as the Governor of California might say “they’re back!!”. Lot’s of work then on the horizon for legal advice and consultancy …maybe I might need to start worrying about foreign lands myself…and then of course, pigs might fly!!