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- The latest issues: 327
PENSION NEWS 07/05
PENSION NEWS
The Secretariat
Richard, Vicki and I are still all here in Sevenoaks, enjoying the sunshine while working hard with the Trustees to .nalise the 2004 valuation, review the Fund’s investment strategy as well as our investment managers. All this while trying to come to grips with new pensions legislation and how it will affect the Fund means that while Sevenoaks may be somnolent the Secretariat certainly is not.
Annual Report & Accounts 2004
The Trustees’ Annual Report & Accounts for year ending
Valuation as at 31 December 2004
The results of the 2004 valuation showed that the current contribution rate of 21% was not suf.cient to cover active members’ future accrual of bene.t. To bring the underlying contribution rate down to the rate actually being paid and to minimise the impact on members the Trustees have decided to raise the normal retirement age for Existing Members (pilots who joined before 08.08.2002) from 60 to 65 for bene.ts accruing after
This does not affect bene.ts accrued to 31.07.2005, but means when your pension becomes payable it will be paid in two tranches; the pension based on service to 31 July 2005 which will not be subjected to a reduction from age 60 onwards and the pension based on service from 1 August 2005 which will be discounted by such amount as the Actuary shall determine, if taken prior to age 65.
Investment Review
In conjunction with the triennial valuation the Trustees are in the process of reviewing the Fund’s investment strategy which may involve a change in asset allocation and/or investment managers. It is a case of watch this space!
OTHER HOT TOPICS
I though I would devote part of this article to a brief synopsis of the other topics exercising the minds of the pensions’ industry at the current time.
COMPULSION
Adair Turner, Pension Commission chairman, speaking at a recent annual dinner said the government must set up a fully funded compulsory pension scheme, which is his clearest hint yet that compulsion will be part of his .nal report in the autumn. Whereas the Prime Minister has reiterated Gordon Brown’s statement that compulsory pension saving will not be introduced in this Parliament.
CONSENSUS
According to David Blunkett, Secretary of State for Work and Pensions, the government, stakeholders and the general public must work together if a consensus on future pension reforms is to be achieved. Unfortunately Adair Turner claims that the major players in the pensions industry are standing in the way of reform because they cannot agree on how it should be achieved. Most bodies agree that there needs to be simpli.cation and a reduction in the ubiquitous means-testing, but are divided on how to proceed. There is also divided opinion on what the state pension age should be with some in favour of increasing it to 70 by 2030 and others like the TUC and Age Concern vehemently against. (Nothing changes)
WOMEN FACE SHORTFALL
A recent survey showed that 55% of women compared to 71% of men were contributing towards a private pension scheme for their retirement. Twice as many women than men expect to retire at 60 (some of us think 55 sounds good) while more than a quarter of the males surveyed expected to work until 65.
CITIZEN’S PENSION
The National Association of Pension Funds (NAPF) believes its Citizen’s Pension proposals would support the government’s twin objectives of encouraging saving and
extending working lives. The NAPF propose replacing the present complexity of state provision with a single, universal, .at rate payment worth at least £105 a week at current prices and rising in line with earnings. The proposed introduction date is 2010 with eligibility being determined by a simple residency test
POTENTIAL SAVERS SCARED OFF BY
WIND-UPS
Research shows that
Some 80,000
NEWS IN GENERAL
EVEN THE ACTUARIES CANNOT GET IT RIGHT
The Faculty and
RETIRING ABROAD
The House of Lords has struck a blow for Britons retiring aboard by throwing out a test case appeal by an expat to have her
Debbie Marten