Archive for the ‘Pensions’ Category
Apples, pears and pensions on divorce
Those very nice legal people at Rawlinson Butler LLP down in Sussex have written a really good article touching on some of the issues around pensions and divorce.
Have a read here. It’s short and sweet and sums up some of the issues really well.
Steve Clark
Unlocking local authority pension funds could build 20,000 homes
According to specialist Hearthstone Investments investing the capital held in Local Government Pension Schemes (LGPS) could help build 20,000 homes.
Last November, Islington Council invested £20m (2.5%) of its pension fund into the TM Hearthstone UK Residential Property Fund to deliver new housing. If this all 89 pension funds did the same it would mean investment for new housing of around £4bn.
Christopher Down, chief executive of Hearthstone, said: ‘The recent landmark investment by Islington Council in the Hearthstone Fund provides a case study for how investment by LGPS can play a role in alleviating this crisis without requiring new sources of capital at a time of austerity.’
Richard Greening, Islington Council’s executive member for finance and performance, urged other pension schemes to join the fund to boost the delivery of new housing.
He said: ‘Our decision to invest in residential property was based on careful analysis of the options. It reflects our view that investment in this sector will produce good long-term returns for local taxpayers and the members of our pension fund.
‘We selected the TM Hearthstone fund because it is the only FCA regulated fund in the sector and is run by a team with considerable investment management experience. The fund offers a tax-efficient means for our pension fund to invest in the UK’s largest asset class without taking on the risks associated with investing in housing directly or in smaller schemes.’
The combined market value of all 89 LGPS in England and Wales at the end of March 2012 was £157bn.
Steve Clark
Call for single pension regulator
The Work & Pensions Committee have called on the government to reassess the case for establishing one body with sole responsibility for regulating workplace pensions.
The Report calls on the Government to reassess the case for establishing one body with sole responsibility for regulating workplace pensions.
Noting concerns over current gaps in regulation and the potential for further gaps to arise as a result of now having three regulators with a role to play, the Report argues that a single regulator is necessary to ensure that all members of workplace pension schemes are adequately and consistently protected.
Comment
The Work & Pensions Committee is simply echoing what those in the pensions industry have been saying for some time. The distinction between the regulation of company pension schemes and contract based plans has been a source of concern for many.
If the Coalition Government is serious about reducing red tape here is great opportunity!
Steve Clark
Changes to auto-enrolment rules?
The Government is consulting on changes to the auto-enrolment regulations.
Fear not, there are no big changes. The Government is just responding to
issues identified in feedback received since some of the largest employers began enrolling employees last year.
The changes include
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Making it easier for employers to use existing payroll processes to determine whether workers need to be auto-enrolled and for assessing whether existing schemes are qualifying schemes.
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Turning off the employer duty to auto-enrol where a worker has recently opted out of pension saving before they were automatically enrolled (e.g. where an employer makes joining the pension scheme a condition of the contract of employment).
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Confirming that opt-out notices need not be identical to the form specified in regulations.
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Extending the joining window deadline from one month to six weeks.
The Government is looking to make these changes in April 2014. As always…….watch this space.
Steve Clark
Give your employees a pay rise at no cost to you. Here’s how!
With the Eurozone in continued crisis, more cuts on the way and talk of a triple dip recession; keeping the lid on business 
finances is vital. But how does that affect your employees?
In many businesses April is pay review time. How will your employees feel if their take-home pay is falling in real terms? It seems that all but the top performers and job hoppers have seen their spending power fall in recent years with little prospect of recovery.
Fed up employees impact on your bottom line. Whether it is failing to come to work with their A-game, distracting others with their tales of woe or the simple act of quitting to go to a better paid job, they can undermine productivity and stop your business reaching its potential.
So its a delicate balance, as always, between payroll and profit and loss. However, if you’re looking to reward your employees there is another way. Employee benefits are a great way of putting money in your employee’s pockets without increasing your costs. In some instances it can actually end up saving you money.
Perhaps the best route to achieving this is through salary sacrifice – something many overlook. Both the employer and employee can benefit in the form of NI savings and/or reduced tax. Here’s a quick run through of how it works.
- Decide which benefits you want to offer your employees. These can be childcare vouchers, pension contributions, medical cash plan, cycle to work schemes, cars, laptops or wider benefits.
- Find a benefits platform to administrate your scheme. This part will cost you but don’t worry their fees will normally come out of the money you’ve saved in National Insurance and tax.
- Offer your employees the chance to voluntarily reduce their salary by the value of the benefits they want. These are then paid directly by the employer.
The recent changes to Child Benefit for higher earners means that some of your affected employees could end up getting some of their Child Benefit back if they use salary sacrifice.
As with any benefit, salary sacrifice needs careful explanation and communication to your employees. They will need to think about the impact of giving up salary in favour of benefits. In some instances they’ll need to get financial advice.
Sounds a good deal doesn’t it. Now if only you could find a company that’s interested in your business, can help you deal with all this, select a provider, source the benefits, communicate with your staff and give financial advice to your employees. The great news, if your reading this, is that you already have. 44 Financial have many years of experience of working with businesses like yours to install salary sacrifice schemes.
If you want one of our consultants to contact you simply click here.
Steve Clark