PM can confirm that Standard Life will launch its wrap offering early in 2006.

Sir Malcom Rifkind, shadow secretary of state for work and pensions, says that the current government’s approach to pensions is dumb, too restrictive and lacks sufficient incentives to save.

The role of work and pensions secretary will be a crucial one in the coming months, says David Laws, since successful pension reform relies heavily on the government itself reaching a consensus on recommendations

Pensions double standards must end, the Trade Unions Congress (TUC) has warned, as a report revealed company directors’ pensions were worth up to 45 times more than most staff pensions.

The Pension Protection Fund (PPF) has confirmed that the two pension schemes from bankrupt car manufacturer MG Rover have been formally admitted into the assessment period for entry into the pensions safety net.

Due to a technical problem, Heath Lambert, Hewitt Associates, HS Administrative Services, HSBC Actuaries and Consultants, Hymans Robertson and Jardine Lloyd Thompson were omitted from table two of the TPA survey results on page 32 of last month’s PM.

Former shadow work and pensions secretary David Willetts has joined Punter Southall & Co as a senior policy adviser to assist with a number of initiatives including chairing a series of pension

Pensions Management is hosting a debate on Monday 10 October, on the issue of pensions reform and the role of compulsion.

Implemented investment consulting is set to grow and may become the key to more effective decision-making, according to industry experts.

There have been a lot of people with itchy feet in the investment industry lately with four senior figures moving to new jobs.

A shake-up in pensions regulation could see self-invested personal pensions (Sipps) brought under the auspices of the Financial Services Authority (FSA) as part of new regulated activity of establishing and operating a pension scheme.

The recent increase in IFA commissions by life companies appears to show an increasing willingness for companies to write unprofitable business in an attempt to build up market share in advance of A-day.

Liability-driven investment (LDI) continues to be a force in the world of pooled pension funds with two more companies considering launching specialist LDI funds to meet this demand.

Small third-party administrators (TPAs) could struggle to adapt to the demands of pensions simplification, Capita Hartshead managing director Mike Addenbrooke has warned.

Trustees are beginning to take action to meet their increased obligations under the new pensions legislation.

Every time I see a communication from HM Revenue & Customs (HMRC) headed ‘Pensions Tax Simplification’, my heart sinks. It has become increasingly apparent that next year’s new regime is anything but simple.

Two former Britannic Assurance senior managers have set up a residential property investment consultancy firm in anticipation of a surge in demand for

Investors planning to enter the buy-to-let market ahead of A-day should look no further than Yorkshire, where rental incomes have risen by more than 36% in the last 12 months.

The effective date of the new tax regime is only six months away, so employers and trustees should be nearing agreement on any related scheme changes. New scheme rules need to be executed before 6 April 2006 to implement some of the changes. So the race is on.

Despite the wall to wall coverage that A-day receives in the pensions press, how many people actually know what the A in A-day stands for?

Scottish Life has updated the A-day section of its online reference tool for IFAs to help provide greater support for advisers.

After much delay, the Department for Trade and Industry is consulting on draft regulations banning age discrimination.

Section 32 (s32) transfers are still being met with a divided response from the industry, as HM Revenue & Customs (HMRC) is told to urgently clarify policy rules, and advisers are urged to quickly evaluate the opportunities open to them.

Clerical Medical has added additional support material including a protection calculator to its pre A-day guide in a bid to provide financial advisers with extra help as simplification draws closer.

Out of professional interest I do keep an eye on how the newspapers report the forthcoming pension changes, particularly with the new range of permitted investments.

I was reading in the press recently about a retired guy in the Midlands somewhere who’s been pretty upset to find out that his local council is advertising a job vacancy for a street naming and numbering officer. Apparently this role requires the job holder to assume responsibility not only for the tough task of naming new streets and roads as they are built, but also to decide on the tricky things like which house should be number one and so on. Although, I guess once you’ve decided where

Have you been keeping up to date with the Trustee Masterclass series produced as a joint initiative between PM’s sister title, Pensions Week, and Merrill Lynch Investment Managers (MLIM)?

Are you ready for another emotional prize-giving ceremony? Where the ecstatic winners celebrate wildly as they claim a trophy they have long coveted, where the fizzy stuff flows freely and crowds of onlookers look on in wonder and maybe envy?

Keen readers of PM will have noted the existence of our annual awards for excellence at pension schemes (see above).

Advising highly paid executives and professionals on what action to take over the new tax simplification rules, which come into effect from next April, is proving much more complex than originally thought, says John Hough

Phillip Robinson looks at the changing world of investment consulting and examines the emerging trends that place increasing focus and pressure on the top consultants in today’s competitive pensions marketplace

Jerry Barnfield has always been on the front line of the pensions industry. Now in his new development role he talks to Ruth Emery about helping people to understand the key issues, and the changes that need to be made

The face of the pooled funds industry has changed dramatically in the 12 months since the last survey and, says Gregor Watt, the process is not yet finished

The Pensions Act 2004 sets out new requirements for funding defined benefits, expected to come into force from September 2005. David Unsworth explains what the new requirements mean for trustees, employers and scheme actuaries

Uncertainty surrounds many of the key issues affecting scheme administration leading up to A-day, but decisions will soon have to be made by employees and trustees on the regulations which have already been announced. Colin Wheeler reports

Pádraig Floyd, executive editor, Pensions Management: Flex is a subject that has been much discussed in the last 10 years. Many companies or employers saw it as an expensive way of achieving what they felt they were already doing. However, in the last five years there have been a number of drivers that have changed the way it is perceived. So what do we understand by flex.

Bradley Belt, executive director of the PBGC, the US equivalent of the UK’s Pension Protection Fund (PPF) talks to Daniel McAllister about the US system and offers some advice on how to make the PPF more effective

The cosy relationship between trustees and employers who run defined benefit schemes has ended. Trustees are finding out there should never have been one in the first place. Everyone needs to change the way they’ve used actuarial advisers, says Marc Hommel

1. Far from it. At the bottom end of the income spectrum, individuals will still have to make the decision as to whether investing in a pension (or any savings at all) is the right course of action. This is because of the potential loss of means-tested benefits, which is effectively a tax on savings. Among other things, the mid-range individual still has to consider that investing in a pension causes a loss of capital if they purchase an annuity or inheritance tax (IHT) implications, with little or no opportunity for IHT planning, if they go the alternative secured pension route. At the upper end of the spectrum, as well as these considerations, people still have access to other tax planning strategies such as film (and other types of) partnerships, enterprise zone property trusts, etc.
2. Communication, as always will be vital in ensuring that the individuals understand all the options available to them and the implications of each option or choice offered to them. For certain segments of the population technology may, and probably will, play an important part but the challenge here is that those employers who have extranets or other technology based forms of communications for their employees are generally not those companies who employ the lower income target audience that the government is trying to encourage to save.
3. The message that needs to be communicated and the lesson that needs to be learned by every- one is that, contrary to popular opinion, people do not retire by age but by income. What I mean is that you can only retire when you can afford to do so, because you have sufficient passive income; you do not retire just because you reach a certain age. Technology can play an important part in showing the shortfall in today’s terms between what someone is earning now and what they will have when they retire.
4. I have grave doubts as to the ability of simplification and technology alone to cause greater take-up of the structures the government wants. This is because of the instant gratification attitude that is all too prevalent in society today. People need to appreciate that they can either play now and pay later or they can pay now and play later, but they will end up paying either way.
   This is an unpleasant fact to have to accept, so I suspect that simplification will make little or no difference and technology, if it is trying to teach you an unpleasant lesson, is all too easily turned off. Personal, face-to-face, advice and persuasion will still be vital but, as ever, this has to be paid for.

1. Quite the opposite, in fact. Some schemes may in the past have been tempted to hide behind the very fact that they were considered to be largely inaccessible to members. Communication may not have been seen as an issue, particularly for defined benefit (DB) schemes where contributions and benefits were fixed and flexibility and member choice were not really an option.
   Simplification will change that for good. Members will increasingly require more concise and clear information about their schemes and the options open to them.
2. The two are interlinked and will be crucial if schemes are to deliver the sort of hybrid solutions to scheme design that we envisage becoming the norm. Robust and innovative technology will underpin the entire administration process and will provide the platform for communication, not just with members, but across the entire operation – trustees, employers and typically the scheme’s investment providers. Innovative communication and technology will enhance the service at every level, creating interest among the membership, while providing understanding and accessibility.
3. In a nutshell, member ‘buy-in’ on a large scale, will only be achieved if this sort of regular communication becomes a reality. Traditional presentations and member roadshows may be an option where the workforce can be easily captured, but for most schemes this is simply not a viable option. Technology holds the key. Take for example the current Department for Work and Pension initiative to develop a retirement planner that will ultimately enable members to understand and therefore take control of their state and private pension provision under one umbrella. Due to be launched next year, such initiatives will provide round-the-clock access to information in a clear and easy to understand fashion.
4. Simplification makes flexible retirement possible by breaking the link between work and retirement, thereby paving the way for new flexible retirement structures to be put in place. Going forward, the very concept of a normal retirement date will effectively disappear. Technology will undoubtedly have a role to play in that administration is likely to be far more complex as a result of the variation in retirement models. At the same time, communication with members will become more hazardous. So yes, flexible retirement structures are most definitely on the administrators’ agenda – how quickly employers and trustees respond to the new flexibility is perhaps more the issue.

1. Simplification will still provide many pension issues which could be helped by the advancements in communication and technology. People saving for their retirement now have a greater individual responsibility to do it themselves – ie with far less future funding from the government and fewer instances of people with long lengths of service in final salary schemes. Part of this responsibility will be the need for individuals to monitor pension fund values on a regular basis to ensure they will match expectations at retirement. To make this as easy as possible for clients it will be essential for financial services to provide the most up to date technology driven communication facilities.
2. This follows on from the previous question in that employees will have to be far more astute about exactly how their pensions work and again how much they are likely to receive in retirement. I think a combination of education and communication/technology will be crucial moving forwards in plugging the savings gap in the UK. An example here would be employers offering interactive and educational online facilities on pension schemes, such as pension calculators. People need to know the severity of the pension situation in the UK and technology and communication will be crucial in educating those who need to act.
3. There are numerous software platforms, usually associated with flexible benefit providers, which enable employees to view details and the numerical values of pensions and other benefits. As well as being helpful and informative to employees it means employers can motivate their workforces by illustrating the cost of benefits packages as a whole rather than people judging their worth purely by salary and bonus. This information is often communicated online and each employee will have their own personalised total reward statement. This type of technology can be installed simply and I do not see it being too long before the majority of companies with benefits have some form of technology such as this to communicate to employees what they have. It will never cease to amaze me how many employees with very generous benefit packages have no idea what they have and what the monetary value is. Employers are missing a trick by not communicating benefits adequately
4. I doubt simplification will mean a greater uptake in pensions as it will be those with substantial funds who will benefit from, for example, the more flexible rules on permitted pension investment. Although improved technology may improve the self administration of pensions, I do not think it will be enough to increase uptake. A major mindset alteration on pensions through education or some form of compulsion are two possible ways to increase uptake but simplification and technology will not have the desired effects.

1. Definitely not. For a start, new disclosure regulations require schemes to provide funding information to members automatically. We are also still expecting annual benefit statements to be made compulsory for DB schemes, so people will be exploring new ways to deliver this information. On top of this, people need to be aware of their annual and lifetime allowances and encouraged to think more about their retirement provision. We all need to find ways to help raise the general level of financial literacy, especially among members of DC schemes. Electronic communication methods offer huge scope for interactivity and self-help.
2. A very important role. Young people entering the job market have pretty much been brought up using computers. These people will expect to access the information they need via their computers and mobile phones. Those of us involved in selling and communicating pensions are responsible for making sure that reliable information is available in a variety of formats to suit everyone.
3. Many larger DB pension schemes already allow members to access their pension records online and to make what-if calculations. DC providers need to provide online management in order to compete for new clients. However, the evidence is that members still prefer to conduct pensions transactions by post or over the phone, than on the internet. What is now needed is to find ways to encourage people to use what is available and this means spending more time, money and effort in getting people involved in their schemes. In terms of more traditional communications, digital printing technology makes it possible to produce benefit statements and newsletters in which both the text and the visuals are tailored to members’ circumstances. This way, every piece of information is directly relevant to them.
4. It will certainly allow it – whether it will assist remains to be seen. While flexible retirement may be desirable from the employee’s point of view, it poses additional administrative challenges for pension schemes. Many people I have spoken to are currently busy making sure that they are fully prepared for the compulsory changes which come in on 6 April 2006 and will address this issue at a later date.

From real-time valuations to modelling tools to company intranets, the advances in technology are being used to help scheme members understand more about their pensions. Pádraig Floyd reports

Communications and technology must combine if schemes are to properly address complex issues of scheme design, says Richard Ascough

The Raising Standards of Pensions Administration initiative has become firmly established in the pensions industry and key to making a real and positive difference for the average member, says John Reeve

Offering a flexible benefits package should be one of the first steps for any corporate business, says Dave Harris

Ruth Emery looks at the actuarial and investment consulting world in the PM annual survey and sees a lot of optimism and hope for the future, as the market responds to changing regulation with new products and awareness of the need to raise service levels

Tax simplification – A-day – is set to be the major driver for administrators and pensions schemes to embrace outsourcing to India to cut costs, increase service quality and gain competitive advantage, says Matthew Vallance

A day on the water finds Oscar Patterson with more than just lobster on his plate, when he has to advise his host, Brutus Grubbs QC, that a trustee’s obligation to inform scheme members isn’t all plain sailing, writes Neil Smith

John Lawson answers this month’s G60 questions on the balance between protecting investments and continuing to make further pension contributions, as posed by the following case study

The benefits to be gained from the maturation of multinational pension pooling could be a major opportunity for countries across Europe, if we can create unified regulations, says Kerry White

Patrick Sumner explains why property markets still show attractive investment potential, as one of the only remaining equities that offers a steadily growing yield for some years to come

Pensions simplification is affecting everyone’s choices, offering greater flexibility to those nearing retirement. Billy Burrows discusses the options that will be available to members of both personal and company schemes

The Personal Finance Society has appointed two prominent financial advisers in the pension industry to become vice presidents.

The Institute of Payroll and Pensions Management (IPPM) has named Maurice Cheng as its first chief executive officer (CEO).

Sonja Schemmann has left DWS Investment in Frankfurt to join Schroders as a fund manager in the global equities team.

International law firm Ashurst has appointed another new partner to its team in the form of McDermott Will & Emery’s Steven Hull.

In case you hadn’t realised, pension simplification is due in six months. Now, it’s not been an easy gestation, but with any luck its birth will be straightforward and successful.

1. Not all of the important work will be done and dusted by A-day. As a industry we have not yet got to grips with the fact that simplification is coming and the plans for it have not been fully put into place, either at individual or at corporate level.
   No doubt there will be an element of playing catch-up after A-day, but for some of the work it, will be too later after the start of the next tax year.
   We are already hearing stories of some pension providers who have a backlog for requests for transfer value quotations, so potentially it could already by too late, depending on who you are relying on for information.
   There doesn’t seem to be much urgency out there and the later that decisions are made, the more difficult it will be to get everything done on time. It looks like we will see too many people trying to do too much in too short a space of time.
2. One very simple implication is that you will have some very angry clients.
   If advisers don’t get things done on their clients’ behalf before A-day, then there is only one person that the client will blame – the adviser.
   If advisers end up in that situation, they will be facing complaints from their clients. It is not realistic to expect individual clients to be aware of the implications of A-day, that is the job of the adviser.
3. I think that simplication will mean very little for the average person. It won’t change their perception of pensions or attitudes to saving. But simplification will make a bigger difference for high net worth clients and those with large pension funds. They will need to ensure that they are positioned to cope with the new regime and for some, they will be able to save more for a pension in a short space of time than previously.
4. Yes, it will do, as long as people understand what flexibility there is. The new flexibility will mainly be to the advantage of high net worth individuals who have advisers who understand how the system works.
   For the average man in the street, the new flexibility will mean very little. Pension schemes will need to take advice on what simplification means for them and individuals will need to look at the bigger picture too, rather than just looking at whether they can use residential property in their pension fund.

1. In practice, most should at least be able to muddle through, but they could miss out on business opportunities. There is also a danger of things not being ready because the government has still to finalise all the rules. So providers and advisers could face major problems through no fault of their own.
2. The major issues are likely to be with those who have lost out in terms of lifetime allowance or tax-free cash protection. Anyone who contributes after A-day rules themself out for enhanced protection, and that could mean a heavy tax charge when they retire. And there could be many people who want to transfer their pension but are unable to do it after A-day without losing tax-free cash protection. That one depends on where HMRC finally sets the rules on allowable transfers after A-day, but some people could be stuck in unsatisfactory arrangements for many years.
3. It makes things simpler to the extent that most people will be able to pay in as much as they can afford without worrying about limits. That is a powerful message, although it won’t make people save unless they were already so inclined. The other major simplification is in having only one fundamental type of pension available, so the focus can be on how much people should save rather than on the best vehicle for it. Otherwise, unfortunately things are generally more complicated, not simpler.
4. There will certainly be scope for much greater flexibility after retirement, including the possibility of taking no income at all until it is actually needed.
   It will probably take some time before everyone is able to take advantage of the full flexibility, both because employers will take time to adjust their schemes and because providers will not have time to develop all the possible features by A-day. In the long term, though, there will be exciting post-retirement opportunities for many people.

1. I can’t speak for other providers but we are on track to ensure we have everything completed for A-day. My big concern is that many advisers will not grasp the undoubted opportunities to engage with clients and to adapt their business model to these opportunities.
   A-day can be the catalyst for many advisers to take an in-depth look at how they operate. It’s the biggest pensions clean-up exercise in history with many opportunities to help clients plan for the future effectively. My worry is that many advisers will continue with day-to-day activity when effective segmentation and planning could reap high rewards. I would urge those who have not started an A-day plan to begin as soon as possible.
2. Advisers have to ask themselves could any of their customers come back and claim they didn’t do the right thing? Regardless of what their terms of business may say, many clients will believe they had a right to advice and it’s a grey area if this falls within the requirements of being treated fairly. The second major implication is that another adviser uses the lack of initial engagement as the reason to take the client into their sphere of influence and through careful A-day support take the client or organisation on as their own client. Many advisers could lose good individual and corporate clients by not having an ongoing dialogue about A-day with their key clients.
3. Yes. For many individuals simplification will remove unnecessary obstacles and bureaucracy that served only to confuse and frustrate. This is also true for employers, especially with group arrangements where it will be easier include employees in the scheme. There is a much more immediate impact on individuals who are approaching their retirement with new rules on tax-free cash, the need to retire to access benefits and triviality which could help them achieve their retirement objectives.
4. There will undoubtedly be changes but it will not happen overnight. Individual arrangements will lead the way as they have the existing infrastructure in place but many group schemes may struggle to offer the full range of options initially with development in this area likely to be more of a slow burner.

Is it realistic to think we can all take early retirement once we’ve had enough of working? Pádraig Floyd discusses the options and asks whether industry or legislation can accommodate a flexible retirement age

With A-day looming closer, there is still much to be done to persuade the UK population to take action, so why not use simple marketing techniques to maximise potential client benefits, suggests John Joe McGinley

Angie Kirkwood looks at trivial and ill-health commutation and the effect that simplification changes could have on the future annuity market

Although the lifetime allowance will affect very few individuals, independent financial advisers with high net worth clients will need to advise their clients of the protection available to them, says Matthew Craig