Author Archives: Carol Vassallo

Government DB proposals could leave members £20,000 worse off

The government has acknowledged proposals in its long-awaited Green Paper on defined benefit (DB) schemes could leave members £20,000 worse off on average.

n an effort to reduce scheme liabilities, the government is proposing to allow “stressed employers” with DB schemes to change their reference point for indexation – the means by which pensioners are protected from...


Firms need extra £10bn cash per year to plug 2016′s DB deficit increase

Companies will need to set aside an extra £10bn every year for the next decade in order to fix the growth in defined benefit (DB) deficits over 2016, according to PwC.

Companies will need to set aside an extra £10bn every year for the next decade in order to fix the growth in defined benefit (DB) deficits over 2016, according to PwC.

Over the twelve months, the aggregate...


Sainsbury’s pension deficit rises £674m in six months

Sainsbury’s has seen the shortfall of its defined benefit (DB) scheme increase to £1.1bn by 24 September following a “significant” fall in discount rates.

Announced in the supermarket giant’s results on 9 November, it revealed the deficit on an IAS 19 accounting basis had risen by £674m after tax since the year-end of 12 March 2016.

The group said this was mainly...


M&S faces £127m ‘sting in the tail’ charge following DB closure

Marks and Spencer’s (M&S) decision to close its defined benefit (DB) scheme to future accrual from April 2017 has resulted in a £127m charge.

In half-year results published on 8 November the retail giant said the change in status of members from active to deferred means they will see an annual increase in their pensionable salary.

Under the scheme rules, active members...


Nigel Chambers: When transferring out of a DB scheme can be a good idea

Pension schemes that provide an income based on final salary have long been held out as the gold standard of retirement provision and indeed, if the person lives a very long time – beyond their life expectancy – they will provide a very high total return.

Defined benefit (DB) schemes are, however, also inflexible – simply allowing a person to take an initial tax-free...


Whitbread deficit jumps 40% to £403m

The deficit went from £288.1m as at 3 March to £403.5m as at 1 September on an IAS 19 accounting basis.

The hospitality firm said the increase was down to the reduction in the discount rate from 3.70% to 2.20% and volatility in corporate bond yields following the referendum to leave the European Union.

Pension payments totalled £43.7m, down 38.9% on last year as the annual...


Should final salary pensions be cut to help employers? Or retirees offered chance to transfer out? Radical ideas to tackle deficits floated

Scaling back final salary pension payouts to savers could be an option to help firms at risk of going bust, an influential industry body has suggested.

‘Flexibility’ over benefits – including reductions in extreme cases – merging smaller final salary schemes and overhauling the regulatory regime are among ideas floated to ease strains on employers and the economy...


Major U-turn on Osborne’s flagship pension reform

Former chancellor George Osborne’s plans to let pensioners sell their retirement annuities has been scrapped by the new Tory Government.

Osborne’s flagship pension scheme was first unveiled back in 2014 and would have allowed pensioners to sell off their annuity for a cash lump sum.

It was initially approved during the March 2015 Budget, and later that year it was announced...


Savers stuck with poor pension incomes after government scraps plan to let retirees sell annuities

Plans to let retirees sell their pension incomes in return for cash have been scrapped, the government has announced.

The proposals would have allowed as many as five million retirees with annuities to sell them on through a secondary annuity market.

It would have been a lifeline for savers trapped for life in poor-value deals. Some pensioners are getting only a few pounds a week...


Taking the plunge: Changing views on defined benefit pension transfers

One of the major changes since pension freedom is the significantly greater interest in transferring out of final salary pension schemes. Historically, it was usually seen as a no brainer to keep a ‘gold-plated’ benefit.

But that is changing. Three-quarters of advisers qualified to give pension transfer advice say they have seen an increase in requests over the past year to move...