The Weekly Wrap: July 27 edition

Pension consolidator approached by ailing retailers

 FTAdviser: The Pension SuperFund has received approaches from defined benefit schemes belonging to several struggling retailers. Head of origination Mark Hommell said trustees appear concerned about the viability of their schemes, but warned that not all will be adequately funded for a transfer into the new DB consolidator. Employers would have to top their plans up to a 105 per cent funding level on the superfund’s prudent basis to be accepted. It follows a number of retailer insolvencies in recent years where pension schemes have entered the Pension Protection Fund.

UK academics set to pay more into pension fund to plug gap

 FT: The Universities Superannuation Scheme has warned that its members will have to boost their pension contributions by 4 percentage points if the scheme is to remain viable. The plan currently has an £8.4bn accounting deficit. If a deal is not struck between academics and universities by April next year, both parties would have to increase the amount they pay in. Employer contributions would rise from 18 per cent of payroll to 19.5 per cent next year, rising to 22.4 per cent the following year. Employee payments would rise from 8 per cent to 11.7 per cent by 2020.

Report proposes changes to Aussie supers' fee transparency

 Ignites Asia: The Australian Securities and Investments Commission is mulling the introduction of a publicly available platform that would allow consumers to compare the fees charged by superannuation funds. An independent report prepared for the regualtor highlighted concerns over the unclear fee structures used by supers, and proposed a total of 14 changes to boost transparency. Data on the average cost of comparable investment options would also be included in marketing literature under the recommendations.

$60bn torrent predicted to flow into US pensions this year

 Fundfire: S&P 500 companies are on track to pour $60bn (£45.5bn) into their US pension plans this year, as tax incentives push employers toward topping up their funding level, according to Bloomberg. It follows an injection of $60.3bn in 2017, revealed in a report by Goldman Sachs Asset Management. Companies must pay a higher fee to the Pension Benefit Guaranty Corporation, the US lifeboat, if their plans are poorly funded, and a change in tax law means employers have until September to receive a tax deduction on their contributions at the older, higher rate.

MPs call for abolition of Lifetime Isa

 FTAdviser: MPs on the Treasury select committee have called for the Lifetime Isa to be scrapped, arguing that the product creates perverse incentives and is poorly understood by savers. The report also found that tax relief was not an effective method for encouraging saving, and called for it to be fundamentally reformed. MPs said the Treasury should consider replacing the lifetime allowance with a reduced annual allowance and a flat rate of tax relief, which could be presented as a bonus payment.

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The Weekly Wrap: July 20 edition

Northumbrian Water makes moves to manage liabilities

Threshold adults favour medium-term saving over pensions

Guidance will have to replace advice for low earners

PASA outlines five pillars of DC administration governance

Tweet of the week

Have you thought about how will you protect people (many of them sick) from being ripped off when they sell for a paltry sum? What consumer protections will be in place? https://t.co/Zk0XqJvLpb

— David Brooks (@PensionsDave) July 25, 2018