Archive for the ‘Pensions’ Category
Only 8% of Asda employees opt-out
According to the supermarket giant only 8 per cent of its eligible workforce opted-out of the new rules on pension enrolment. Asda was one of the first UK employers to reach it’s staging date.
According to Asda the helpline they set up got calls from about 3% of the workforce during the opt-out period. Asda had conducted a comprehensive communication programme designed to explain the changes and emphasise that this was not a pay cut.
This level of opt-out is well below the 20-30% predictions we have seen. Only last month the consultants to the largest employers who had reached their staging date were quoting opt-out rates of up to 10%.
Financial Planning and Divorce
No-one who is going
through a divorce finds the process easy: it’s long, messy and almost always painful. Even if there are no children involved, divorce is a procedure that takes its toll on both sides: the acrimony, the paperwork – and the inevitable meetings with your solicitor.
It’s understandable that many people involved in a divorce want to minimise the number of meetings they attend and simply let the solicitors get on with sorting it out.
Unfortunately, trying to cut down on meetings could be a serious mistake. Divorces are not just about broken relationships, dividing up the family home and arranging custody of the children. Sadly, they’re about financial planning as well – and meetings with your independent financial adviser may turn out to be even more important than meetings with your solicitor.
Even if a couple have only been married for a relatively short time their financial affairs are likely to be inextricably linked. The mortgage will almost certainly be in joint names; they could well have shared protection policies and pension benefits may need taking into account when assets are divided.
Couples who have been together for longer – and an increasing number of people are now getting divorced in later life – will find the financial situation even more complex. Pensions will certainly be an area that requires specialist financial advice as some people, particularly high-earners in final salary pension schemes, will have built up pension funds which could well be worth more than the family home.
The new rules on pensions sharing in divorce have introduced a variety of options when it comes to dividing accumulated pension funds: they have also introduced the need for some seriously complicated (and potentially contentious) calculations, making expert advice absolutely essential.
All these areas mean independent financial advice can be crucial to making sure that any financial ‘damage’ you suffer as a result of a divorce is kept to a minimum, and that you emerge with a clear idea of the financial planning steps you need to take in the aftermath of the divorce.
Virtually no-one relishes going through divorce proceedings, but if you find yourself in that position, seeking out independent financial advice will be one of the wisest decisions you make. A good IFA will help make sure that you receive the best possible financial ‘result’ from the divorce and will work with your solicitor to see that everything runs as smoothly and painlessly as possible. Whether it’s helping to sort out the mortgage, reaching an equitable settlement of pension assets or any of the other complications that a divorce can throw up, an IFA will be on your side, constantly giving advice with your best interests at heart.
If you are – or fear that you might become – involved in divorce proceedings then please don’t hesitate to contact us. We’ll provide you with expert and wholly confidential advice – and do our best to make sure that the financial pain of your divorce is kept to an absolute minimum.
Steve Clark
Tartan Taxation–Celtic chaos for pensions?
Being a Scotsman (albeit having lived in England for most of my life) the question of will we, won’t we have independence has cropped up since, in my case, 1976.
Well it now seems that the Scotland Bill – which is currently making its way through Parliament – may well cause further turmoil in an already downtrodden pensions world.
We thank Louisa Knox of law firm Shepherd and Wedderburn, for her recent article that draws attention to the problems the current Scotland Bill would pose for the pensions industry. It is an excellent and thought provoking piece. You can click through to the article here.
The last thing the pensions world needs is more uncertainty and red tape. It would seem as if the Holyrood and Westminster politicians need to get their heads together to think this one through. What is the chance of that happening?
Steve Clark
Charities – the ticking pension time bomb
Much has been written about the ticking time bomb faced by charities that participate in multi-employer pension schemes. These multi-employer schemes are a minefield for the uninitiated.
If you’re a member of one of these and you:
· Find yourself with no active or eligible members; or,
· Become insolvent; or’,
· Undertake a merger or other restructure
you could find that your Trustees are on the hook for liabilities way in excess of the reserves and funds that you have.
Take the recent example of The Wedgwood Museum that faces having to literally sell off the family silver to pay a pension debt much of which was nothing to do with it. It’s “crime” was to find itself as the “last man standing” when the Wedgwood group of companies got into financial trouble.
Following this high profile case (which you can read more about by clicking here) the Third Sector and pension industry have been lobbying government. Their case was that the legislation that caused this was meant to stop limited companies from walking away from their pension liabilities following a group restructure. It was, therefore, unfair to impose this fully on charities that were not seeking to walk away from their liabilities.
Conservative peer Lord Flight raised the issue in the House of Lords yesterday, calling for the legislation to be amended to avoid museums and charities being forced to sell their assets.
On behalf of the government, Baroness Rawlings said it had reviewed the Wedgwood case carefully and believed that it would be inappropriate not to apply this rule to charities.
So there seems to be no real will to exclude the Third Sector from the unintended consequence of the legislation. This is potentially bad news. With the drive to outsource public sector services to the Third Sector more and more charities are being asked to consider taking on employer membership of multi-employer schemes such as those within the Local Government Pension Scheme.
If you are a Trustee of a charity that is tendering for this type of contract, or if you’re already in one of these scheme, be very very careful. Take professional advice and enter into any agreement with your eyes wide open.
Steve Clark
Steve Clark has provided front line advice to a number of high profile charities on their pension strategy. Currently, 44 Financial Ltd advise a number of not for profit clients on the business risks associated with outsourcing and pension and benefit liabilities. You can email Steve by clicking here.
Cost cutting–alternatives to redundancies
We’re constantly working with clients and prospective clients looking to make sure that the money they spend on benefits is effective.
In the current economic climate we look to save money for the employer. In a previous blog post “Is your advisor saving you this much?” we looked at the money we had saved a client who had recently appointed us. You can read the post by clicking here and find out how we saved them £95 per day!
When things like the benefit spend have been tackled some employers are still looking to save costs and then go on to consider redundancies. We received an update today from McDermott Will & Emery – an international legal firm. There’s a really good article in there that cover alternatives to redundancies. It’s well worth a read if you are looking at this type of exercise. You can click here to read the article.
If you are looking to save money on your benefits programme please email us at talk2us@44financial.co.uk.
Steve Clark