An article in the Times today (20 Jun 2011) has raised the issue of the development of a two tier occupational pension being provided by companies. Those of us well versed in the machinations of the UK pension industry would probably say ’so what else is new’ but maybe for some readers of this blog, it needs a bit more explanation. So here goes:
Posts Tagged ‘NEST’
Get with the Rhythm…
After a bit of a break to recharge my pension batteries (lounging on a beach works wonders!!) normal service is resumed with a report of recent happenings in the pensionsphere.
I have just got back from a fantastic conference organised by Mallowstreet which was frankly unlike any pension conference I’ve ever been to. I loved the motivational speakers and the drumming session (yes really!!) was amazing once one got over the slightly cultish feel to the rhythmic beat.
A truth universally acknowledged…?
Today’s big story of course is the Government green paper on the future of the basic state pension. Currently one of the lowest in the developed world it stands at a paltry £97.65 a week (assuming you have a full National Insurance record) rising to a minimum income guraranteed top up figure of £132.60 if you have no other income from other sources such as a company pension scheme.
A is for Apple, B is for Ball….
Now we all know that pensions are difficult. That’s why my clients pay me very reasonable fees to sort it out for them. The National Employment Savings Trust (NEST) have just published their research paper showing that its target audiences don’t understand many of the terms and phrases used by the pension industry and have produced a ‘phrasebook’ to help raise levels of understanding. I don’t know how much they paid for that piece of research but I (and any one else involved in pensions) could have told them that for free!!
No one said it would be easy…
Now that the dust has settled a bit on the excitement of the Auto Enrolment announcements of last week, I thought I might just sit down and try to understand a little bit more about what the proposals might actually mean in practice, particularly for small to medium sized businesses. I’m not addressing the really small employers here – those with just a few employees and who previously provided no pension provision. Yes, it’s true that they will for the first time have to look at this, but generally, they will probably just auto enrol into NEST and be done with it.
It’s coming home to Roost
So, we pretty much now know that Auto Enrolment is going ahead as is NEST. A couple of concessions seem to have been made in that the minimum salary level for AE is rising to £7500 (which is about half the National Minimum Wage) and there will be a 3 month transitional period before AE needs to commence for new employees.
The people are revolting…
Well back from my holidays and time to catch up with what’s been happening in the wacky world of pensions! The ‘honeymoon’ period of our current Coalition Government seems well and truly over and as we approach Conference season, the militants are flexing their muscles. Despite a new offer to their members, the BBC pension arrangements look set to provoke a strike by members of Unite and BECTU leading to the blacking out of the Conservative Meetfest.
Who’d have thought it…?
Although it is really something of a statement of the bleedin’ obvious, PwC have recently issued a report which after extensive (and no doubt extremely expensive) research has concluded that Final Salary Pension Schemes will have ceased to exist within 10 years. This is not exactly ground breaking news to those of us within the Pension Industry who have been watching the death throes for several years now.
A miscellany of news
A couple of bits and pieces this week to blog about. First the recent decision of the European Court of Human Rights dismissing an appeal by expat pensioners that they had been discriminated against because their pensions had not been increased in the same way as pensioners who remained in the UK.
Pots, Kettles, Black…
In the past, most of my blogs have been about the sorry state of the Defined Benefit pension scheme and its probable inevitable demise at the hands of poor regulation, economic circumstance and Government interference.
I thought this week then, it was time to look at the bright new future (which for these purposes is not the dreadful NEST) but the Defined Contribution or Money Purchase Scheme. This has for some time been the option of choice for employers who want to be seen to provide a decent workplace pension arrangement but without the downsides of costs and deficits which can grow to the size of the gross domestic product of a small country!!
Jennie advises large multi-employer schemes as well as smaller single employer arrangements and has wide experience of both Defined Contribution and Defined Benefit schemes. Jennie qualified in 1986 originally as a criminal prosecutor. She sits as a Magistrate in her local justice area and is an Approved Chairman and Deputy Chair of the Bench Training and Development Committee. Jennie was formerly Legal Director of the Occupational Pensions Regulatory Authority. When her busy practice allows, Jennie likes to indulge her passion for travelling. To consult Jennie on any corporate Pensions matter, please call her on +44 (0)20 7749 2700 or send her an email by clicking below: