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Lifestyle pension schemes have been developed in the United Kingdom and involve a gradual move away from equities as customers near retirement. They offer a third option to the traditional with-profits and unit-linked schemes. Lifestyle schemes may not always make the move out of equities at the best time to take advantage of market conditions, and customers may lose out if a switch is made prior to a price rise for equities, or just after a stock price fall.

The UK Pensions Act of 1995 will significantly alter the British pensions business when it takes effect on Apr. 6, 1997. Under the new system, trustees will play a greater role in the management of pensions. They would be required to participate in the funding of the plan and make decisions regarding contributions schedule. These trustees would also be mandated to report to the Occupational Pensions Regulatory Authority for failure to perform their responsibilities. Penalties for non-compliance can be harsh, which include fines and even imprisonment. The appropriate procedures should therefore be established right from the very beginning. Communication with professional advisers may be needed to prepare for the Apr. effectivity of the new act.

An increasing number of UK companies are abandoning the traditional final salary scheme in favor of money purchase or defined contribution plans. A possible explanation behind this phenomenon is that the traditional scheme is no longer responsive to the makeup of the modern workplace, where women predominate, seasonal or contractual workers are many, and employees with non-conventional households are increasing. Another probable cause for the movement toward money purchase is the Pensions Act, whose new requirements and costs for running final salary schemes have become so prohibitive. In contrast, the flexibility and portability of money purchase schemes are making it possible for companies to adjust to these new developments. The merits of the different types of money purchase plans are discussed.

Companies may be compelled to switch back to defined benefit plans, after they have moved to defined contribution schemes to shift the burden of pension administration to workers. Recent social, demographic and economic trends as well as government regulations and accounting guidelines will force companies to rebuild the pension system based on defined benefit plans. Unions are batting for defined benefit plans, which offer greater pension predictability than defined contribution programs.

The United Kingdom Pensions Act 1995 is forcing Scottish employers to abandon traditional pension arrangements and adopt lower-cost alternatives. Some have already dropped final salary provision in favor of money purchase while some have even gone to the extreme of stopping to provide pension. Trustees are disheartened by the stiff penalties, prison sentences being the most severe, for failing to comply with the Pensions Act. Actuaries and professionals are also discouraged by the heavy administration load imposed by the Act and the costs of complying with the Act. Another reason why employers are abandoning traditional pension is the rapid evaporation of large surpluses in many final salary schemes.

Employers commit 10 common mistakes in managing their Employee Retirement Income Security Act (ERISA) plans. These include the failure to classify plans as 'pension plans,' non-compliance with ERISA's reporting and disclosure requirements, failure to realize the fiduciary responsibilities of being an ERISA plan sponsor, improper administration of an ERISA plan and failure to clarify ambiguous terms in plan documents., Compliance with ERISA'S myriad rules and regulations can be tricky. Here's a list of the top 10 problems to watch for. Since the mid-1970s, sponsors of employee benefit plans have [...]

Pension fund trustees had not given much attention to how their cash was managed, prior to the Barings collapse. Barings INvestment Management (BIM) had placed 100% of pension fund clients' cash with a single bank. However there is concern that the more a fund is spread out, the poorer the overall return may be. Some fund managers maximise returns via a pooled loan facility.

The owner of Sunrise Leather used to manage his store's pension and profit-sharing plan on his own. But as the regulations governing retirement plans became increasingly complicated, Paul Harris was [...]

Retirement planning differs according to many factors such as employees' age, civil status, employment status of a spouse and the presence of dependents. Employees over 55 years old already have a good idea of the amount of employer pension benefits and Social Security benefits, making it possible for them to have non-financial considerations. Younger employees should emphasize capital accumulation, income stream and provisions for dependents in case of early death. Preretirement counseling and the retirement decisions of working women are also discussed.

Selecting a suitable personal pension policy is one of the major concerns of salaried workers and self-employed earners. Except for small self-administered schemes and private self-administered personal pensions, the contracts that were available to them in the past did not allow them to have any say in how their premiums were to be invested. Fortunately, the 1989 Finance Act introduced the concept of the self-invested personal pension (SIPP). A SIPP is a personal scheme that is similar to a standard personal pension plan in that both are subject to the same eligibility, contribution and benefit rules. The big difference is that SIPP participants can make their own investment decisions. They are free to control and track their pension premium investments on their own or with the assistance of their chosen financial advisers.

The American Society of Pension Actuaries (ASPA)'s National Retirement Income Policy Committee is recommending the setting of national pension targets as well as the use of four income sources to meet such targets. These recommendations were contained in a national retirement policy statement issued by the ASPA committee. The statement stressed that the recommendations would need a general revamp of the national pension system, but that these proposed changes are dependent upon one another.

Byline: Tom Selby Retirement planning news Britain's biggest companies have seen defined-benefit pension deficits fall by £26bn in the last 12 months as quantitative easing and the eurozone debt deal [...]

Can customer-agreed adviser charges simply replace trail?Many advisers have been changing their business model over the last few years to one where long-term client relationships and ongoing advice replace a [...]

Byline: Steve Tolley Advisers have slammed Lab-our's decision to promote Rachel Reeves from her role as Shadow pensions minister, saying it shows that the party is not taking the pension [...]

In Lorna Blyth's article in Money Marketing headlined, Stick or Switch, she states that there is no tool on the market that can produce a comprehensive compar-ison between platforms and [...]

Byline: Tom Selby The regulator is ramping up its pension transfer examination standards to include continuing professional development units covering changes to the tax regime and automatic enrolment. The FSA's [...]

Byline: Pensions By Tom Selby ATP has confirmed plans for a multi-employer trust-based pension scheme to rival Nest ahead of automatic enrolment. In March, Money Marketing revealed the Danish public [...]

Workers need to fend for themselves THE RICH WILL always have a comfortable retirement; the poor will be supported by the state. For the people in the middle, the best [...]

Any acquirer considering buying another company's stock must understand the extent of potential costs surrounding pensions and benefits. Pensions and benefits represent an area of growing complexity to the most [...]

In recent years, employees have often been asked to defer pay rises or reduce holidays in order to safeguard their jobs, so when they hear about so-called 'salary sacrifice' schemes [...]

Small tokens of appreciation for a job well done can often be a more powerful staff motivator than expensive benefits, says Jenny Keefe Workers at computing support company IT Lab [...]

Byline: Rich Saskal ALAMEDA, Calif. - Four unions representing California state employees agreed to contracts that require workers to contribute more to their pensions and provide less generous benefits to [...]

Encouraging a savings culture among employees will boost interest in pensions Easy access to credit, boosted by advertising and today's culture of instant gratification, has led many people to run [...]

Two-thirds of IFAs believe the financial services industry needs to actively promote good quality pension schemes ahead of auto-enrolment to minimise levelling down. Aegon surveyed 100 intermediaries specialising in corporate [...]

Q Are career average revalued earnings (Care) pension schemes a good bet? A Care schemes reduce cost only in respect of employees who have above- inflation pay rises - generally, [...]

My last (http://www.govexec.com/dailyfed/0110/011510rp.htm) two (http://www.govexec.com/dailyfed/0110/012210rp.htm) columns on service credit deposits -- that is, payments to the federal retirement fund to receive credit for certain types of military and civilian service [...]

The desire for pension portability and a mobile workforce have combined to make these plans extremely attractive to both employers and employees. Once something of a novel idea in the [...]

Companies are discovering that sorting out the affairs of their employees whose pensions are invested in failed guaranteed investment contracts (GICs) is a highly complicated and time-consuming task. All options that can be taken to resolve the situation seem to be fraught with obstacles. An employer can purchase a bad GIC from the plan at face value, but only if a waiver is granted by the Department of Labor. Obtaining a waiver can take months. Freezing retirement accounts is another option, but it may not be beneficial for retirees who would then be forced to start withdrawing upon retirement to avoid taxes. On the other hand, if employers contribute too much to the plan, they can incur tax penalties or breach non-discrimination regulations. As for overcoming the difficulty of monitoring the individual balances of a GIC fund's participants, it is suggested that employers adopt class year accounting., Helping employees whose pensions are entangled in defaulted guaranteed investment contracts is like finding your way through a maze, plan sponsors are discovering. 'The situation is unprecedented,' exclaims John Marshall, [...]

Defined Benefit Plans And The Reality Behind The Misconceptions Under the layers of federal regulations, many plan sponsors have become increasingly frustrated in the management of their pension programs. Since [...]

ILGWU Retirees Allege Raynor Misused Funds Retired members of the International Ladies Garment Workers Union entered the legal scrum between UNITE HERE and Workers United when they accused the breakaway [...]

The National Hockey League has underpaid the widows of some deceased players and employees, according to a decision by Ontario Superior Court Justice Paul Perell. The case calls into question [...]

Byline: KATHERINE MANGAN In a move seen as a harbinger amid worsening economic conditions, a struggling Nebraska institution has ended its retirement contributions for all employees. The decision by regents [...]

Almost any life insurance company used to be considered a safe pension investment. Not any more. For some retirees and company pension plans in Michigan, the moment of reckoning is [...]

Nonqualified pension plans can be a creative, improved approach to compensating key employees. The federal government has increasingly limited the ability of employers to offer meaningful and attractive retirement benefits [...]

Feds, States, Employers |Sold Out' Workers: Senator WASHINGTON--The federal government, state regulators and employers 'sold out' workers and retirees by failing to meet their responsibilities to protect the nation's pension [...]

Q: OVERDUE RENT We have rented our premises since 1996. A three yearly rent review was carried out in 1999. At the 2002 review a rent increase was also agreed [...]