June 2009
'Pensions are not the only path' Samantha Watts is quoted:
Ms Watts says the material is not as complex as her maths degree, but the sheer volume of work that has to be committed to memory is onerous.
In the later stages of the qualification, the subject becomes much more practical and subjective and there are, perhaps somewhat surprisingly, even units on communication.
All exams are funded for students and they receive one study day a week, but this is nowhere near enough time to ensure a pass says Ms Watts, who took three and a half years to complete the 15 units: "I spent weekends and evening studying when the exams come up.
"It's not an attractive proposition. But the more you get through the exams the more interesting work you get to do. Financial Times (Appointments), 25 June 2009
'Mortality projections model tailored to user needs' Joanne Livingstone is quoted:
Joanne Livingstone, principal and actuary at Punter Southall, described the publication of proposals as a landmark in shifting debate about the appropriate projections to use away from the old cohort projections.
She added: The model and the working paper that accompanies it will be important tools in explaining to trustees the range of possible future longevity improvements that might apply to the members of their scheme and the implications for the funding of that scheme. Joanne Livingstone, 19 June 2009
CBI report on reforming pensions practice in public services contracting: Punter Southall comments:
Speaking following the CBI’s recent launch of its report “A question of balance”, on reforming pensions practice in public services contracting, John Prior, Head of Punter Southall’s public sector outsourcing team comments:
“The CBI’s call for public sector employees to be allowed to remain in their existing pension scheme when their work is outsourced to the private sector makes eminent sense. Such an approach would provide better value for money for taxpayers and would be welcomed by employees and their representatives.
"The main barrier to the CBI’s proposal is likely to come from HM Treasury, whose position is that all risks associated with a service that is being outsourced should normally transfer to the contractor, including pension risks.
"Well-informed contractors simply increase their contract price, recognising that the transferred pensions risk has a value, and will often need to price this risk on a “worst case” scenario. The Government’s desire to transfer risks therefore needs to be balanced against its objective of achieving value for money from outsourcing.
"Private sector contractors are often advised to price pensions at roughly double the cost that the Government charges public sector employers for the same benefits. Therefore, either the Government is basing its pension costs on over-optimistic assumptions or, as it would presumably argue, it can provide pensions more cheaply than the private sector. If the Government really believes that it can provide the same pension for half the price that the private sector would require then surely the “best value” solution must be for these pension risks to remain with the public sector.” 19 June 2009
'Move by Barclays and BP could signal the end of final salary plans' David Cule comments:
"The important thing is that individuals face up to the change.
"At Barclays the change will make little difference to those up to five years away from retirement. They have already built up a good pension and the 20% guarantee won't leave them much worse off.
"Those who are a few years younger and may have to save a bit more than they intended. But 40 year olds will have to completely re-think their pension planning" The Scotsman, 7 June 2009
'Capital rules may have forced Barclays DB decision – consultant' Simon Banks comments is quoted:
Simon Banks, principal at Punter Southall, suggests the pressures on banking groups now to meet regulatory standards and capital limits means any shift in the pensions balance could force other firms, like Barclays to reconsider their pension plans.
"One might think a too big to fail bank like Barclays would be well able to absorb the risks of final salary scheme, said Banks.
However banks are generally required to carry extra capital to protect against pension risks, over and above their contributions to the pension plan. In an environment where capital is tight this hidden pension cost assumes greater significance."
He continued: "The actions taken by Barclays should reduce the amount of capital required to back future pension promises. I wouldn't be surprised if other banks and building societies took similar action in the coming months." Investment & Pensions Europe, 5 June 2009
'In Brief: MPs pay' John Prior is quoted:
John Prior, Punter Southall says any increase for MPs to compensate for loss of allowances "could easily be classified as non-pensionable provided MPs are willing to make the necessary changes to the rules of the MPs' pension scheme". Pensions World, 1 June 2009
'CBI: Give us a level playing field ' John Prior comments:
"Many contractors are put off from bidding on public sector contracts by the associated pension liabilities. The public sector does not recognise the true value of the pensions that are being promised to its employees." Pensions Age, 1 June 2009
'Round up the major pension developments from the past four weeks' Simon Banks is quoted:
Simon Banks principal at Punter Southall describes the news as "the beginning of another wave of scheme closures" Pensions Age, 1 June 2009
'Pleasing the pensioners' Richard Jones is quoted:
Even though a certain amount of public information can be garnered about a pension fund by a potential acquirer of its sponsoring company, the devil is frequently in the detail, says Richard Jones, head of transaction services at actuarial consultant Punter Southall.
"There is only so far you can go with public information" he says. "There are often lots of quirks within pension schemes that are hidden from view. Nearly always something will come out."
For this reason, he finds it hard to generalise about the current predicament that trustees of pension schemes might find themselves in when confronted with their sponsoring company facing a financial restructuring.
"It all depends on the situation regarding the distressed business. There are a wide variety of potential outcomes for pension schemes, ranging from carrying on as before to biting the bullet and going into the Pension Protection Fund (PPF)" he says. Acquisitions Monthly, 1 June 2009
'Porous Pensions' Richard Jones comments:
"All businesses should be looking at their schemes and assessing their appetite for risk, how they should be investing assets, what they can do with liabilities, and how much cash they are prepared to put into a scheme" says Richard Jones, a principal at Punter Southall.
"Investment strategies and benefit structures need to be negotiated with trustees and will vary depending on a company's situation. The most important thing is to try and have an element of flexibility that allows a company to adapt to changing circumstances" Jones says. Real Deals, 4 June 2009
'Concern grows over tax relief cut' Joanne Livingstone is quoted:
We call on the Treasury to end the panic and uncertainty immediately by explaining clearly what the benefit-in-king charge is designed to achieve, what exemptions there will be for existing promises and commitments, and the rationale for tapering.
The Government has spent a long time bringing in pensions simplification, only to begin a new era of pensions complication. Pensions Insight, 1 June 2009
'Trivial commutation rules get more complicated' Jane Beverley is quoted:
But Jane Beverley of Punter Southall said the move would save costs and lighten administrators' workload. "For nearly two years, members have found themselves caught with small pension pots that have to be paid out as tiny pensions because the member has benefits elsewhere. I am delighted that HMRC has seen the force of the case presented by the pensions industry during the consultation process." Pensions Insight, 1 June 2009
'After the budget' Danny Vassiliades is quoted:
Focus on the individual Danny Vassiliades, principal at Punter Southall argues that the rules have a much greater impact on the individual members than on pension scheme administration.
"The bottom line for scheme administration is that it doesn't need to change at all. What's affected is individuals own tax position. The issues are for employees with salary sacrifice arrangements and for individuals using pension contributions to reduce their tax bill" says Vassiliades. Pensions Insight, 1 June 2009
'Fujitsu closes scheme to future accrual' Punter Southall quoted:
The actuarial firm Punter Southall commented that it believed that the beginning of another wave of scheme closures. The firm added "We know that many other companies are considering similar action, and some are in advanced discussions with trustees. The turbulence in the markets over the last 12 months has reminded employers of the volatility they are exposed to through their pension plan. At the same time, many are squeezed for cash and are having difficulty repaying deficits in the timescales they have previously agreed. In such situations, the funding regime introduced 2005 steers employers and trustees towards closure to future accrual and using the savings to address the deficit. This approach means that trustees are placed in a difficult position, balancing the future benefits of members against the security of the benefits already promised." IDS Pensions Bulletin, 1 June 2009
'Regulators life the lid on pre-packs' Richard Jones is quoted;
However Richard Jones, principal at Punter Southall Transaction Services, which sponsored the roundtable, said other creditors, such as the pension scheme sponsored by a company going through a pre-pack were putting in place "anti-embarrassment clauses"
He said there was an unwritten rule at the Pension Protection Fund, which provide UK safety net to retirement scheme members, that if they take on a pension scheme as part of the administration or pre-pack, they will take some equity.
Jones said "If you have got any connection at all with the company before the administration, the PPF wants a third of the equity. If you are completely new and clean then they will take 10% of the equity and this is known as the anti-embarrassment stake." Private Equity News, 1 June 2009'Longevity swaps' Matthew Furniss comments:
This is a welcome move in the journey for schemes looking to remove risk." Pensions World, 1 June 2009
'Get into auto mode' Jane Beverley is quoted:
In March, the department for work and pensions issued a consultation on the draft auto-enrolment regulations for 2012. But the draft appears complex and time-consuming for employers, especially those seeking to introduce auto-enrolment before 2012 says Jane Beverly, head of research at Punter Southall. The document states that for contract based schemes, new staff will have to receive basic information about the scheme within the seven days of starting work. Within a further seven days, the employee must be enrolled into a qualifying scheme. For occupational plans including the new personal accounts, the joining and information provision windows with both run for 14 days. "The regulations are highly technical and it will take quite a long time to introduce them in a way that meets the requirements in 2012" says Beverley. "These are on draft regulations, so they may well change".
"Employers might want to wait until we have got more final regulations because they might introduce processes that are not convenient for them just because they are in the draft." Employee Benefits, 1 June 2009
Punter Southall Pensions Bulletin - July 2010