Pensions

Pension deficits and Arnie: the week in news

This week months of work culminated in a chaotic frenzy of paperwork and money. We’re not talking about Isa season, but transfer deadline day, which saw sums of money change hands that might even embarrass a fund manager.

But whether you found the bargain of the summer or are lucky to have enough players for a team (oh, hello Arsène) then we’ve got something for you in the week in news.

1) Simply red

Speaking of huge sums of money being thrown into an endless black hole, there has been news on defined benefit pension scheme deficits this week.

Pension scheme deficits as a proportion of UK plc profits have risen so much in the last five year they are now even higher than in the immediate aftermath of the financial crisis, according to the latest figures.

The aggregate pension deficit of the UK’s top 350 companies grew by £12bn in 2016 to reach £62bn, a report from actuarial consultant Barnett Waddingham has found.

This is equivalent to 70 per cent of pre-tax profits – which totaled £88.9bn for the year.

The total deficit of all the DB pension funds in the UK stood at £460bn at the end of August, an increase of £40bn since last month, according to figures released from PWC.

2) Come with me if you want to live!

As the Financial Conduct Authority kicks off its campaign to terminate complaints about payment protection insurance it has called on some famous help – well, sort of.

In an advert launched this week an animatronic model of Arnold Schwarzenegger’s head – voiced by an impersonator – is seen urging people to make a decision about making a PPI complaint before the deadline on 29 August 2019.

This hilarious/surreal/horrific image will appear on TV, online and on outdoor advertising across the UK over the next two years.

By 2019 we might all be welcoming the sight of that bloody meerkat.

3) Regulators gonna regulate

It seems unlikely, but a regulator appears to be doing what the industry has called for.

Following a roundtable with advisers, providers and scheme administrators, The Pensions Regulator is working with these groups to draw up a template to be filled by pension administrators when they are asked for a DB transfer value.

This document should reduce the amount of information requests from advisers, and the time spent in this process.

The template is expected to be published next year, since TPR is working with the FCA on this initiative.

4) Stirling work

A group of investors who lost money in unregulated investments sold by advisers is challenging the Financial Services Compensation Scheme over their payouts.

The investors backed funds managed by Stirling Mortimer, which were unregulated and invested in the development of overseas property in places such as Spain and Cape Verde.

British financial advisers sold the funds to investors who poured £91m into them, invested mainly via their self-invested personal pensions.

But the compensation body has refused to write down the value of the funds to nil.

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