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The Weekly Wrap: November 14 edition

By Lisa Botter | November 14, 2014

A round-up of pensions and investment stories published across the FT Group – from the government allowing widows to remarry and keep their war pension, to an uphill battle for the Pensions Infrastructure Platform. 

UK pension plan ‘unworkable’, warns expert

Week in numbers 

  • Plan to impose a fine of £300 on savers that access pensions flexibly has been deemed "unworkable"
  • Targeting a return of 5% is unrealistic for schemes 
  • PIP has invested just £330m of £2bn target 

FT: Plans by the government to levy fines of £300 on savers if they fail to notify all their pension providers when accessing pensions flexibly have been deemed “unfair” by pensions expert Ros Altmann. In written evidence submitted to MPs she wrote that fining savers was “unworkable” and “draconian” and would “disproportionately disadvantage” the less wealthy. 

War widows can retain pension if they remarry

FT: Prime minister David Cameron has said that war widows who remarry will no longer face a financial penalty. Under an existing loophole, thousands of women who started claiming a pension between 1973 and 2005 could not remarry or live with new partners without losing the war pension of their previous partner. This rule will be scrapped from next April. 

Pension funds target ‘unrealistically’ high returns

FTfm: European pension funds are targeting “unrealistically” high returns that could widen deficits, according to analysis by Create Research. The research found funds target a median return of 5 per cent a year, with 28 per cent of schemes aiming for 6.6 per cent a year or higher. Amin Rajan, chief executive of Create, said these targets look “aggressive alongside the return forecasts for this decade.”

UK pension association’s infrastructure plan buckles

FTfm: The Pension Infrastructure Platform has invested just £330m of assets out of its goal of £2bn. Mike Weston, who was appointed chief executive of PIP in October, asserts that there is much to do to drive interest in the platform. He said: “We have a communications challenge with pension schemes and investment consultants. At the moment it is easy for investment consultants to say they cannot recommend [the] PIP as we do not have a website or track record.”

Regulatory uncertainty limits alternative investments in Nordic countries

MandateWire: Nordic pension insurance companies are weighing up whether to increase investment in alternative assets, as the full impact of the Solvency II directive is still unknown. These companies may be forced to drop riskier assets when the directive comes into force in 2016. However, MandateWire data show alternative investment managers won half of all Nordic mandates so far this year.  

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