Women lose out in new pension reforms
Experts have warned that many married women could lose out under the proposed reforms to the state pension being planned for 2016, says the Financial Times.
At present, married women can qualify for state pension based only on their husbands’ National Insurance contributions – but that will change from 2016. After that, only women who have paid the ‘married women’s stamp’ will qualify for state pension.
If you reach retirement age before 2016, the changes won’t affect you. Married women who will reach pension age later and haven’t paid National Insurance should get advice on their situation.
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
NOW: Pensions –that’s Quality!
New breed pension provider NOW: Pensions has become the first master trust to attain the new PQM READY standard.
The benchmark will help show employers that NOW: Pensions is a well governed pension scheme with low charges and good member communications.
PQM READY was set up by PQM (Pension Quality Mark), the mark that recognises good quality defined contribution pensions, to help employers spot a good multi-employer pension scheme or master trust.
To get PQM READY schemes need to show, among other things, proof that independent trustees are in a majority or have a casting vote, and that member communications are clear, regular and engaging.
This announcement also means that employers that use NOW: Pensions will be able to make a fast-tracked application for PQM. They will only have to demonstrate PQM’s contributions standards to get the certification.
You can read more about the Pension Quality Mark by clicking here.
Comment
It’s good to see NOW: Pensions embrace the PQM. We placed our first scheme with NOW: recently and have been impressed with their ethos and communications.
There is much pressure from the regulators for these types of pension schemes to be fairer, more transparent and charge members less in running costs. We’re sure other providers will follow.
Steve Clark
McDonalds serves up a very low pension opt out rate
McDonald’s says only 2.4% of its hourly-paid and 2.7% of its salaried employees that were auto-enrolled on 1 January 2013 opted out of pensions.
McDonalds has 91,000 employees in the UK. Of those 35,000 are hourly paid.
"There were already 2,000 of it’s salaried employees that were members of their stakeholder defined contribution (DC) pension scheme.
An additional 1,100 salaried staff were auto-enrolled into this scheme.
A total of 9,500 hourly-paid employees were auto-enrolled into the National Employment Savings Trust (Nest) in January.
Comment
The demographics of the McDonalds workforce would lead you to suspect that opt-outs would be high. The low rates they have achieved will be welcome news for the government but bad news for employers looking to estimate how many of his own employees will opt-out.
Steve Clark
Photo Courtesy of Flickr – Leonid Mamchenkov
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