Pensions ‘require funding boost’

31 August 2010 Last updated at 05:42 ET

Workers may need to pay more for their pensions amid a continuing picture of fund deficits, two surveys suggest.
Employees of large firms could have to invest more because of the costs of a new system to include more people in company pensions, actuaries warned.
Four in 10 companies would reduce future scheme benefits to pay the additional costs, the Association of Consulting Actuaries’ survey found.
Meanwhile, KPMG said business growth could be hit by pension costs.

The accountancy firm said that its analysis showed the UK’s largest firms were facing a growing pensions shortfall.
‘Cut back’
The poll of large firms conducted by the Association of Consulting Actuaries (ACA) found that 41% of employers said they were “likely” or “highly likely” to cut back the benefits of existing deals.
This was because they needed to meet the cost of a new scheme - being brought in from 2012 to 2017 - to automatically enrol some workers into a company pension.
Exactly the same proportion of small businesses said they might cut their existing pension scheme entirely and replace it with a government-sponsored scheme, when the ACA conducted a poll last year.
The government is currently reviewing the auto-enrolment plan. Companies will initially only have to pay in 1% of a worker’s earnings, rising to a minimum of 3% by 2017.
Individuals will have to contribute 4% of their salary to their scheme, with the government topping this up with 1%.
Continue reading the main story
“Start Quote

The pensions outlook for those aged 45 and over no longer looks quite as spectacularly good as it did”

Read more

War for talent resumes as salaries climb

However, the number of permanent jobs available fell from 60.7 in June to 60.2 last month. While the figures still represent growth – they register above 50 – it is the slowest rate of expansion seen in nine months, the survey found.
Separately, the Reed Jobs Index, also published this week, recorded a decline in vacancies in July compared to last month, but showed salaries had remained “steady” for the third month running.
Penny de Valk, chief executive of the Institute of Leadership & Management, said: “Supply and demand effects aren’t just about quantity but also quality. The war for talent is not over. Good people are still hard to find and companies will pay a premium for them.”
She added: “We may have been too slavish about sending everyone off to university and bypassing the powerful vocational and professional routes which employers so often desire.”
The REC/ KPMG reported highlighted several skills that were in short supply, including accountants, HR professionals and business analysts, on top of sectors that were traditionally hard to recruit for, such as IT or engineering.
Ms de Valk said companies were willing to pay a premium for managers who had a track record in taking on “major changes”, to help employers through uncertain times.
Human resources (HR) chiefs across sectors agreed the ‘war for talent’ was back on following a period where staff had been willing to take pay cuts or work shorter hours just to stay in a job.
Christian Armstrong, HR director at Guoman & Thistle hotels, said: “Vacancies are declining as employers look to the uncertainty of the marketplace in the second half of the year.” But, he said: “In certain specialist occupations, the market has become more competitive in the fight to attract and retain the most talented staff.”
Some employers in the engineering and technical sectors were crying out for specialist skills, even despite nearly 2.5m people being out of work, experts said.
Rachael Henderson, HR director at building services company Norland Managed Services, said she was becoming “increasingly frustrated” by the lack of desire among younger people to pursue a career in the engineering environment.
“We have an ageing workforce and in 10 years time, I really fear that the few technically qualified people around will be able to dictate any [employment] terms they wish as companies fight to recruit them.”
She cited a recent example where an apprenticeship candidate at the company pulled out at the last minute because he had got through to the next round of the pop-star wannabe TV show The X Factor.
“This is an extreme example, but trying to persuade the younger generation that technical professions can offer just as stimulating a career as the media or the dotcom industries is very difficult when they live in a media-driven culture,” she said. “How can I compete with Simon Cowell?”
Five Filters featured article: “Peace Envoy” Blair Gets an Easy Ride in the Independent. Available tools: PDF Newspaper, Full Text RSS, Term Extraction.

Is Kent Reliance looking for new payday?

Despite the urgency in his statement, Kent Reliance members might have been
surprised to know how close the building society’s management were to making
good on their words.

Just 13 days after the results announcement, Kent Reliance’s bosses were
presented with a report they had commissioned from the corporate finance
department of accountants KPMG suggesting what that radical solution might
be.

In a four page presentation, KPMG laid out the potential for a management
buyout of the business.

Read more

Private pensions are hit for £100bn: Final salary scheme change will affect millions

By
Becky Barrow
Last updated at 10:53 AM on 9th July 2010

Final salary pensions in the private sector will plunge in value following explosive changes revealed yesterday. A technical change to the way annual increases in pensions are calculated each year means millions of pensioners and workers will be worse off. Accountants KPMG said it could reduce private sector pension promises to workers by ten per cent, or about £100billion. 
Potential misery: Millions of OAPs could be worse off as a result of the changes (posed by model)
At present, the annual increase is linked to the retail prices index measure of inflation, known as RPI. But from January next year, it will be linked to the consumer prices index measure of inflation, known as CPI. This is typically far lower than RPI. 

The move has echoes of Gordon Brown’s £5billion a year tax grab on pensions, one of his first moves as Chancellor in 1997. Laith Khalaf, a pensions analyst from the financial advisers Hargreaves Lansdown, said: ‘This may be great for pension schemes but as usual that means it is absolutely terrible for pension scheme members.
‘Final salary pensions in both public and private sector are losing their golden sheen.’ Many of the anticipated 5.3million victims will have already retired and will be claiming their pension. RPI is currently 5.1 per cent but CPI is only 3.4 per cent. Someone who is currently receiving a pension of £10,000 a year would
get £25,270 a year in 20 years’ time if the annual increase was linked
to RPI. Yesterday’s changes mean that the same pension will
be worth just £18,875 a year after two decades in retirement, according
to calculations by Hargreaves Lansdown. This is a total difference of more than £50,000. The Government says the move will help companies keep their gold-plated pension schemes open. But pension experts yesterday accused the Government of making a stealth move. In
the Budget last month, the Chancellor made clear that State pensions
and public sector pensions would be subject to this change. But no mention that it would also affect company pensions was made.
Dr Ros Altmann, a leading pensions expert and former Number 10
adviser, said: ‘How much misery can pensioners have piled on them?’ Shadow
Work and Pensions Secretary Yvette Cooper said: ‘Many pensioners will
feel betrayed. During the election both parties [now in the coalition]
promised to help them’ Pensions Minister Steve Webb said CPI was ‘a more appropriate measure of pension recipients’ inflation experiences.’ But
John Prior, from the actuaries Punter Southall, said: ‘The only people
who will benefit are employers, and the people who will pay the bill
are their employees. It could be devastating for some of them.’ Workers whose pension scheme has explicit rules promising to link increases in line with RPI will be protected.

Share this article:

Read more

CGT rise to 28pc will hit 100,000

By
Daily Mail Reporter
Last updated at 10:59 AM on 23rd June 2010

More than 100,000 high earners will be hit by a 10 per cent rise in capital gains tax.
But after a vigorous campaign by Tory Right-wingers, George Osborne watered down demands by the LibDems to hike the headline rate to match the 40 and 50 per cent rates of income tax.
Instead, he raised CGT from 18 per cent to 28 per cent from midnight for those with second homes and shares who pay the higher rate. In a signal that he had listened to critics who told him he would end up losing money if he sent the rate soaring, however, he made clear that the Treasury would have lost money had he put the rate even a single point higher.

Tax Burden: Stephen Less and his wife PennyIn another concession, officials said the increase will be reviewed
after one year to make sure that it is actually raising money. That
opens the door to a rate cut next year.

Basic
rate taxpayers who have second homes or share portfolios will see no
change in their CGT rate when they dispose of assets. For them, it
remains at 18 per cent. 

Read more

Budget 2010: air traffic control system, student loans, Tote put up for sale

He also said that broadband bandwidth could be sold off “to support super-fast
mobile services” while the Government would “resolve the future of the Tote
- at last”.

Plans to sell the Tote were shelved by the Labour Government in October 2008
because market conditions were at that stage “not appropriate”.

Mr Osborne also confirmed that the Government would press ahead with a“private
capital injection into the Royal Mail Group, something that has been long
overdue”.

Read more

Jobless recovery fears return as recruiters report hiring slump

Message from Five Filters: If you can, please donate to the full-text RSS service so we can continue developing it.

Mr Green called on the Government to take urgent action to avoid a new ‘lost
generation’ of workers.

The temping jobs market fared better, with the index showing that temporary
placements rose from 58.7 in April to 59.2 in May, with the demand for
temporary staff the strongest for blue collar workers and the engineering
and construction sector.

Read more

Inflation fears raise pressure for a rate rise

Message from Five Filters: If you can, please donate to the full-text RSS service so we can continue developing it.

By
Dan Atkinson, Mail on Sunday Economics Editor
Last updated at 10:45 PM on 5th June 2010

The spectre of higher inflation will loom over this week’s meeting of the Bank of England’s nine-member Monetary Policy Committee.
While the MPC has insisted that recent price increases are temporary and caused by short-term factors such as oil prices and tax rises, there are growing fears that inflation could be taking root again.
City and independent economists surveyed by the research group Consensus Forecasts have been pencilling in ever-higher estimates for the Consumer Prices Index for 2010.

Bank of England: Economists say the Monetary Policy Committee may have to admit it is wrong

Read more

Lloyds’ Antler deal raises ‘conflict of interest’ questions

“This is a state-owned bank and we are concerned about the amount of debt
it is converting into equity. I did ask Eric Daniels [Lloyds chief
executive] this question at the Treasury Select Committee meeting in January
but he did not have a clear answer.”

Mr Fallon said that UKFI – which manages the Government’s stakes in the banks
– needed to account for the way executives were being paid at Lloyds and for
their lending practices.

“UKFI is ultimately responsible not only for managing the Government’s
stake [in Lloyds] but also ensuring that we get the best results. They are
accountable and they will come up before the Treasury Select Committee once
Parliament is reconvened.”

Read more

General Election 2010: Income tax bills to rise by £10bn

By Robert Winnett, Deputy Political Editor


Published: 11:38PM BST 05 May 2010

HM Revenue & Customs is expecting to collect an extra £10 billion in
income tax, of which almost £9 billion will be paid by those earning more
than £40,000.

The tax grab will continue regardless of who wins the election as both the Conservatives
and the Liberal
Democrats support Labour’s
plans.

The projections from the revenue show that it expects Britons to pay a total
of £161 billion in income tax during the 2010-11 financial year, £10 billion
more than in 2009-2010.

Read more

Next Page »