The Pensions Regulator’s decision to take an equity stake in a failing company in lieu of making good the deficit of an underfunded scheme may face a legal challenge.

The US government looks set to radically change its pensions and social system, said David John, a research fellow with the Washington based think-tank, The Heritage Foundation, after giving evidence to the House of Representatives’ committee on Ways and Means sub-committee on social security.

It is essential that future pension reform is founded on a broad and strong consensus and the SNP believes that a consensus for radical reform of the pension system is growing, says Mike Weir

According to government research, a lack of trust in pensions and other financial commitments mean that some sections of the public cannot be persuaded to save more for retirement.

In response to increasing regulatory pressures rising from the Pensions Act 2004, Ace has relaunched its Elite pension trustee liability product.

I was reading in the paper the other week about a new ‘Rent a German’ website that offers Germans for every occasion. Evidently, you can get a family German who will cook you German food while talking sport and politics in the kitchen.

The Social Market Foundation (SMF), the economic and social affairs think tank, is setting up a working group to examine how a compulsory pension would work in the UK.

Despite the much-publicised arrival of combined pension forecasts (CPFs) next year, many third-party administrators (TPAs) have found there is little client demand for them.

Jocelyn Blackwell, managing director of Higham Group has seen off fierce competition to win the First Women of Finance Award.

Adnitor, the technology and platform consultancy, has launched two new businesses this month designed to ease the take-up and implementation of e-commerce systems.

Adoption of e-commerce within the financial services arena is being hampered by the poor quality of online services.

Rumours that Zurich is about to finalise a deal that will see it enter the wrap platform market have been quashed by the insurer.

The growing volume of investment transactions at defined contribution (DC) schemes is driving a new initiative to improve the transfer of data from third-party administrators (TPAs) to fund managers.

More than half of women have not made any additional financial arrangements for their retirements, compared with 40% of men.

The FIA (Faculty and Institute of Actuaries) has recently issued a draft revised version of GN11, the guidance note that actuaries follow when calculating transfer values. Consultation on the new version ends on 11 July and the intention is that the new guidance note will be in place by the end of the year.

IFAs who normally offer investment advice but are now moving into retirement planning must be careful to get to grips with the technical issues or they risk causing another mis-selling scandal according to actuary and pension specialist Wolanski.

People who do not save towards their pension are twice as likely to be smokers and less likely to own their own house, than savers.

I am starting to see a change in people’s attitude to pension simplification. The subject is rapidly moving up the priority list as people recognise the volume of work involved.

Changes to the rules governing income drawdown and the calculation that will be used to assess the amount of income taken before A-day could have serious implications for investors with large sums of money in drawdown plans.

Private equity is likely to play an increasingly important role in a balanced pension portfolio when plans to allow direct investments in unquoted companies via Sipps come into force on A-day.

The new tax regime for pensions has been heralded as bold, visionary and radical. And one that, in the round, delivers on its fundamental objective – simplification.

It has been revealed that some TPAs will charge clients for core compliance changes for A-day, in addition to scheme-specific changes.

So how is it going for you (pensions simplification I mean)? Only 10 months to go, and counting.

The Pensions Management Scheme Awards have now opened for 2005.

The third annual Pensions Management Technology Awards for 2005 has been judged and the results placed under lock and key.

The time is also approaching for the seventh PM Admin & Service Awards.

There is always great competition in the large scheme of the year category in the Pensions Management Awards, open to schemes with assets of more than £500m.

Is your pension scheme bang up-to-date with the latest whizzo technological developments? If yes, great and we hope you will be entering the technology category in this year’s Pensions Management Awards.

The awards for the outstanding contribution to pensions is the only category in the Pensions Management awards that is not limited to occupational pension schemes.

The notion that an IT-led solution, drawn from a distinctly different distribution model in the US, can be applied in UK is looking increasingly ‘ill-wrapped’, says David Harris

Pension fund trustees need to be aware of the value of credit derivatives and their fund manager’s expertise in using them, says Jamie Grant

Twenty years ago, over 20 companies offered what would be today deemed to be competitive annuity rates.

Now, less than 10 companies are in the market during any 12 month period, and four of these are impaired and/or enhanced specialists, says Stuart Bayliss

Robin Ellison, the new chairman of the National Association of Pension Funds, suggests taking a simple, but direct route to solving the pensions crisis, writes Gregor Watt

This PM survey is the first of its kind to reveal what stage TPAs are at in their simplification planning, and what concerns they may have. Ruth Emery reports on her findings

William Watling looks at the new wave of closed book deals and the impact these might have on intermediaries

The realisation that A-day is just round the corner has sparked renewed interest in the section 32 market but, says Pádraig Floyd, this does not mean that this route is the right move for everyone

Since we are all for fair dealing, why do we, as an industry, remain wedded to a model of pensions charging which is, at its heart, fundamentally unfair? asks Mark Polson

Since drawdown was launched. it has been no more that modestly successful, and sales have been flat over the last two years, but from A-day the proposed changes seem set to make unsecured income increasingly flexible as a retirement product, says Gregor Watt

John Lawson answers this month’s G60 questions on the new rules for additional voluntary contributions, posed by the following case study

Did the advent of the Pension Protection Fund (PPF) spell the death knell for pension scheme wind-ups? Russell Agius says the introduction of the PPF did change the guise under which wind-ups take place, but a significant number of wind-up activities will remain

The new rules on borrowing are not consistent with the new pension regime and failing to respond to this issue will lead to the introduction of both unfair and flawed legislation, which will undermine the integrity of the new pension regime from day one, says Andy Bell

In addition to commercial and onshore property, investors have to consider overseas property when using a Sipp as an alternative investment vehicle for pension planning, says Peter O’Sullivan

For many, Sipps will be the first and only choice for pension funding. But, for the entrepreneur, there are seven reasons why SSAS must be, as they are now, the preferred choice post A-day, says David Seaton

The Pensions Act 2004 introduces new responsibilities about which experience shows many employers are not yet fully aware, says Alan Smith

Jason Shaw examines the determination M00949, which concerns the disclosure of legal advice to a beneficiary

Custody providers have many ways of setting themselves apart from their competition, but for each custodian that exits there is another prepared to forge its way into a new market and use an aggressive pricing strategy to achieve this, says Kate Parker

Investing in bricks and mortar will have obvious attractions but will property investment be able to produce the yield required to pay an income to match the income from an annuity? Billy Burrows investigates

Richard Lockwood says that removing the benchmark shackles from portfolio managers can have benefits for investors

Henderson Global Investors has appointed two directors of institutional business in the shape of David Morley and Cecilia Moynihan.

David Blunkett has confirmed The Pensions Regulator’s executive directors, following a process of open competition for the roles.

The Pensions Management (PMI) has appointed Roger Booth to the position of chief executive.

BNP Paribas Asset Management’s (BNP PAM) Chantal Mazzacurati has recently been appointed to a variety of high-profile roles at the firm.

As we approach what is often confusingly referred to as the English summer, thoughts turn to longer days, increased leisure, the smell of cut grass and nowadays, when everyone seems to be hyperallergenic, the consequent sneezing fit and swollen face.

1. As a provider we recognise the importance of clear, concise and accurate communications. Pensions are renowned for being both complex and, at times, dull. But good communication can be used to good effect to help overcome these problems.
   Good communication provides potential members with clear and easy to understand information, so that they can make an informed decision about joining and the options open to them. It is important to provide members with regular updates about how their plan is performing.
2. As a product provider, we demonstrate successful administration in several ways, some of which are:
   - Independent recognition of service levels through awards;
   - Immediate allocation of money to members accounts. Payments are viewable by members on line the day after the payee instructs us to collect the money;
   - Immediate issue of policy documentation. Policy documents are issued the day after we receive the necessary data to establish member records.
   Simplification will further increase the importance of service as there will be less to differentiate the products themselves.
3. Investment options should be monitored to keep funds both broad and high quality, so it is important to take appropriate advice.
   - A written annual investment review should be sent to members;
   - Member education is key and will help allay concerns in the event of a downturn in performance.
4. The most effective way to ensure ongoing service levels are maintained is to arrange regular meetings between the client and the client manager to cover:
   - Detail on the amount and type of work received;
   - The turnaround of these items compared to previously agreed service levels;
   - This should include and identify email, paper and telephone requests.
   It is vital to understand the client experience of the service, how it 'feels' for them, and to encourage site visits for client and provider 'people' to meet.
   The major differences between providers are the application of technology (rather than the availability of it) and the functions which are carried out manually.

1. There is a growing realisation that defined contribution (DC) communication should no longer be just about compliance, that it is making sure employees have been given all the risk warnings that will protect the trustees and employer from potential litigation.
   Communication should also be about member engagement – pension plan sponsors commit an enormous resource to funding and running their plans. It makes sense to ensure that members both understand the full value of that commitment and the implications for their own personal financial circumstances.
2. In the past, many plans relied on an absence of complaints as the yardstick by which they measured administration ‘success’. Where bundled DC providers were involved, they might have been prepared to offer various service standards, usually in terms of timescales for completing certain basic transactions, but were often unable to offer more than basic reporting on these.
   The technology-led revolution that has taken place over the past few years now means that all providers worth a place on provider short-lists offer comprehensive service standards and regularly report on performance trends in both quantitative and qualitative terms.
3. DC investment options are not a ‘set and forget’ matter and must be reviewed regularly. Markets change over time as do relative competitiveness of charges, investment managers’ perceived skill levels, member understanding/engagement and member objectives (eg the potential shift of members from purchasing LPI-linked annuities to level annuities).
   One of the other key things that trustees need to get right is consistency of communication. It is sometimes difficult to keep communication lines open when investment performance is going through a downturn (as it has in the recent past), but doing so pays significant dividends in the long-term.
4. Regular (at least quarterly) reporting on service performance by providers is a pre-requisite. Trustees (or committees for contract-based plans) need not physically meet that often, but they should review reports to ensure that they can intervene, where necessary, at the earliest opportunity. There needs to be clear guidelines on what are satisfactory or sub-standard performance levels and it is helpful if everyone is aware, from outset, of the protocols that will be applied to these reviews.
   In addition to these standard review processes, it is often helpful to arrange some proactive sampling of member communications and service response times.

1. The role of DC communication has evolved from simply sending out the annual benefit statement, to establishing a detailed communications plan for each employer. A wider range of communication methods including email, e-cards, text messaging, mailings, telephony, workshops and web casts are now used to ensure each employee receives their communication in a format that suits their working practice. The objective has moved from updates on their current scheme values to engaging at outset with ongoing financial planning education. By working closely with the employer and the adviser, we can identify which types of communication are going to be most effective and what messages need to be communicated.
2. Schemes assess the success of their administration within DC through a number of quantitative and qualitative measures. These include benchmarking each administration process through service level agreements for completion in conjunction with an average processing time. This allows the scheme to measure the speed of service against an agreed set of criteria while, at the same time, measuring the efficiency of the actual process being undertaken. This can be done at a macro level so that overall performance is monitored and also at a micro level where you can assess individual administrators' performance. These measurements feed into the overall performance management system for the adviser and employer.
   Qualitative measures centre around anecdotal feedback and satisfaction surveys. Schemes also look at the level of complaints being received to provide an indication of any particular issues. In addition, we undertake quality audits of completed work that provide useful feedback on the accuracy and also the customer experience that individual members' receive.
   Pensions simplification should have no impact on how schemes assess administration, although it is likely that specific measurements would need to be developed as part of the overall management information process.
3. In keeping with the Myners’ principles, any DC arrangement needs to offer a sensible choice of funds covering the main asset classes, which will in turn cover the risk/reward spectrum, enabling members to pick funds to suit their own circumstances. However, many members still feel uncomfortable making investment choices, so thought should be given to introducing a default option (while recognising it will not suit everyone), probably using some form of lifestyling. Choosing the right asset classes has the greatest impact on members’ benefits, so the emphasis of communication should be on the assets characteristics, rather than over-emphasising managers and performance.
4. A specialist EBC adviser will be invaluable to the scheme manager when choosing a suitable provider. They will conduct a detailed analysis of the clients’ requirements and help ensure that ongoing service standards are maintained once the scheme is set up. The range and quality of services will vary between providers. Scheme managers should, therefore, obtain client references and ensure all the services they require are included in the scheme charge. For consistent investment performance, a regular review with their adviser, assessing the investment managers strategy in the major asset classes, will highlight any action that needs to be taken.

Traditional communication methods have worked fairly well up until now in explaining pension schemes to its members. However, in a changing pensions environment, Gary Smith argues that we are now facing the dawn of a new era in pensions communication

While there are advantages to having a trust-based scheme, there are also a number of disadvantages. These chiefly revolve around the increased (and increasing) regulation on employers and trustees under the pensions acts, says Chris Bellers

One of the biggest imponderables for employers running trust-based schemes is how many fund choices to provide. All the evidence suggests that the greater the range, the fewer choices members make because it all becomes too confusing, says Ceri Jones

The new world of pensions will not change the glaring need for people to start and or increase contributions to retirement planning. The question that must be asked, though, is how will top-up arrangements take shape post A-day, says David Allen