Seems a bit of a fudge job to me.
Employers/owners who have been shown to rob their company pension funds before the firm goes belly up should receive a mandatory 30 years without parole plus the sequestration of their entire familys' wealth.
That would sort out the problem overnight.
Solution the problem, not its effects.
------------------------------------
The 2% charge is no chumpchange either.
The Managers charge around 2% p.a. too, plus divi tax changes and other charges from the custodian and trustee add another 1%...thats about a 5% charge of a funds value in good and bad years...
Property still the best IMO.
In a crash at least you've still got a roof over your head.
-----------------------------------------
Employers warned on pension fund
By Paul Lewis
BBC Radio 4's Money Box
The chairman of the new Pension Protection Fund (PPF) has warned "unscrupulous" employers that they cannot dump their problems on the fund.
When it starts in April 2005, the PPF will step in when an employer goes out of business leaving its pension fund with too few assets to pay the pensions promised to its staff.
The PPF will pay the pensions of retired people in full, and up to 90% of the pensions promised to people not yet retired, subject to a cap of £25,000 a year and restrictions on inflation proofing.
There is some evidence of unscrupulous employers out there
PPF Chairman Lawrence Churchill
The pensions industry has expressed concerns that some companies would try to take advantage of the new system, withholding contributions to their pension funds and then going bust, knowing the PPF would step in.
Speaking exclusively to the BBC Radio 4's Money Box programme, PPF Chairman Lawrence Churchill said he had heard rumours that some employers were delaying insolvency until the fund starts work next April.
He told the programme: "There is some evidence of unscrupulous employers out there.
"But there are measures in the Pensions Bill which allow us to set aside the liabilities of companies who are deliberately trying to put their problems onto the PPF and we will take full account of those powers when we look at individual cases."
'War for talents'
The fund will be paid for by an annual levy of 2% on company pension funds.
Mr Churchill denied these costs would encourage even more employers to pull out of pension schemes that offer staff guarantees of a pension related to their salary.
Already many of the UK's largest companies have closed such schemes to new members.
These schemes are a very powerful incentive for staff to join them and stay with them
Mr Churchill
He told the programme:
"I do not believe that the amount of the levy, around 2%, is going to be a major cause of changing their approach to these final salary schemes.
"Most employers run them because they are extremely popular with staff. And in the war for talents which many industries face nowadays, these schemes are a very powerful incentive for staff to join them and stay with them."
Restoring confidence
Asked what would happen if a major company went bust leaving the PPF to take care of a scheme with a large deficit, Mr Lawrence insisted the fund would still be able to meet its promises:
I would like the Pension Protection Fund to be recognised as the body that restores confidence in pensions
Mr Churchill
"Because we will take in the assets of the scheme as well. The comprehensive modelling that has been done leaves us confident that the level at which we have set the levy should be sufficient in the long term."
But he warned that if the fund could not meet its promises, the levy would rise.
"I would like the Pension Protection Fund to be recognised as the body that restores confidence in pensions as a whole.
"We have a particular remit to make sure that members of final salary pension schemes are protected if their employer goes insolvent."
http://news.bbc.co.uk/1/hi/programmes/moneybox/3842425.stm
[This message was edited by eek on June 26, 2004 at 10:25 AM.]
Employers/owners who have been shown to rob their company pension funds before the firm goes belly up should receive a mandatory 30 years without parole plus the sequestration of their entire familys' wealth.
That would sort out the problem overnight.
Solution the problem, not its effects.
------------------------------------
The 2% charge is no chumpchange either.
The Managers charge around 2% p.a. too, plus divi tax changes and other charges from the custodian and trustee add another 1%...thats about a 5% charge of a funds value in good and bad years...
Property still the best IMO.
In a crash at least you've still got a roof over your head.
-----------------------------------------
Employers warned on pension fund
By Paul Lewis
BBC Radio 4's Money Box
The chairman of the new Pension Protection Fund (PPF) has warned "unscrupulous" employers that they cannot dump their problems on the fund.
When it starts in April 2005, the PPF will step in when an employer goes out of business leaving its pension fund with too few assets to pay the pensions promised to its staff.
The PPF will pay the pensions of retired people in full, and up to 90% of the pensions promised to people not yet retired, subject to a cap of £25,000 a year and restrictions on inflation proofing.
There is some evidence of unscrupulous employers out there
PPF Chairman Lawrence Churchill
The pensions industry has expressed concerns that some companies would try to take advantage of the new system, withholding contributions to their pension funds and then going bust, knowing the PPF would step in.
Speaking exclusively to the BBC Radio 4's Money Box programme, PPF Chairman Lawrence Churchill said he had heard rumours that some employers were delaying insolvency until the fund starts work next April.
He told the programme: "There is some evidence of unscrupulous employers out there.
"But there are measures in the Pensions Bill which allow us to set aside the liabilities of companies who are deliberately trying to put their problems onto the PPF and we will take full account of those powers when we look at individual cases."
'War for talents'
The fund will be paid for by an annual levy of 2% on company pension funds.
Mr Churchill denied these costs would encourage even more employers to pull out of pension schemes that offer staff guarantees of a pension related to their salary.
Already many of the UK's largest companies have closed such schemes to new members.
These schemes are a very powerful incentive for staff to join them and stay with them
Mr Churchill
He told the programme:
"I do not believe that the amount of the levy, around 2%, is going to be a major cause of changing their approach to these final salary schemes.
"Most employers run them because they are extremely popular with staff. And in the war for talents which many industries face nowadays, these schemes are a very powerful incentive for staff to join them and stay with them."
Restoring confidence
Asked what would happen if a major company went bust leaving the PPF to take care of a scheme with a large deficit, Mr Lawrence insisted the fund would still be able to meet its promises:
I would like the Pension Protection Fund to be recognised as the body that restores confidence in pensions
Mr Churchill
"Because we will take in the assets of the scheme as well. The comprehensive modelling that has been done leaves us confident that the level at which we have set the levy should be sufficient in the long term."
But he warned that if the fund could not meet its promises, the levy would rise.
"I would like the Pension Protection Fund to be recognised as the body that restores confidence in pensions as a whole.
"We have a particular remit to make sure that members of final salary pension schemes are protected if their employer goes insolvent."
http://news.bbc.co.uk/1/hi/programmes/moneybox/3842425.stm
[This message was edited by eek on June 26, 2004 at 10:25 AM.]
