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Pension Funds

CPS report on auto-enrolment recommends reforms

Reinforcing Automatic Enrolment, recommends giving people a stronger sense of personal ownership over their savings; ensuring that the opt-out rate remains low; broadening eligibility criteria - particularly for lower earners and the self-employed; increasing the potential retirement income of lower earners; incentivising contribution rates above the statutory minimums; radically simplifying the current pensions and savings system; and saving the Treasury £10billion per year.

The report, written by CPS pensions expert Michael Johnson, says that while auto-enrolment in workplace pension schemes has been a success, the government can do more to encourage saving, especially among young people and the self-employed.

The report says this can be achieved by scrapping all Income Tax relief and NIC rebates and replacing them with a 50% bonus paid on the first £2,000 of post-tax contributions (paid by employee or employer) and 25% on the next £6,000 (i.e. annual bonus cap of £2,500).

Graham Peacock, managing director at Salvus Master Trust, said that although of the ideas in the report are interesting, it's possible they could undermine the overall success of auto-enrolment.

He said: "With £38.2bn spent on pension tax relief in 2015/16, tax payers deserve a measurable improvement in retirement outcomes - particularly those most at risk of a bleak retirement.

"Johnson's proposals appear to be centred on the cost to the Treasury - rather than helping any group in particular.

"Some of the proposals are welcome in theory, for example, that barriers to saving such as the £10k tax threshold are removed," he added, "however, this needs to come as part of a wider package of tax reform, particularly around net pay arrangements, which unfairly favour high earners.

Lydia Fearn, head of DC at Redington agreed: "The suggestion that auto-enrolment contributions for under 50s should be eligible to be paid into a workplace LISA simply adds another layer of complexity to what is fast becoming a confusing space.

"As an industry, we need to continue to provide simple and easy ways for members to save for their futures and we need to think about incentivising lower earners and self-employed people to make sure they have a reasonable amount of savings to help them in later life."

First published 21.07.2017


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Pension Funds

Push for DB transfers, despite advice

The research also showed more than two out of five advisers (44%) have seen a rise in the past year in the number of insistent clients wanting to push ahead with defined benefit pension transfers, despite recommendations against.

About half of advisers with insistent clients (51%) say they have helped with the transfer after their recommendation was over-ruled.

The biggest concern advisers had (61%), the research said, was about the impact of defined benefit transfers on consumers is the risk of giving up a guaranteed income for life, while 56% fear clients will face unnecessary tax bills as a result.

Stan Russell, retirement expert at Prudential, said: "Our research shows that, although most defined benefit scheme members are wary of transfers, interest in transferring final salary pensions schemes has increased markedly over the past four years."

"Relatively high transfer values and the fact that pensions can be left as part of an inheritance are among the main reasons why clients might insist on a transfer, even if it is not in their best interests."

Russell went onto say that the trend leaves advisers with a dilemma.

"The valuable benefits of a defined benefit pension should not be given up lightly because it involves transferring investment and longevity risk from the employer and is irreversible once complete."

"Advisers needs to ensure their clients understand the risks of a transfer, including longevity, market volatility, inflation, taxation - and ensure it is in the best interests of clients."

The survey also showed that around 39% of firms, are concerned about the risk of future liabilities if advice they give is contested, while 17 per cent are concerned the cost of professional indemnity insurance will rise.

Prudential said firms are responding by ensuring they have the right Financial Conduct Authority permissions to conduct transfers.

Prudential's research found about 34% of firms are considering increasing the permissions they have while 17% say they already have the required permission.

First published 21.07.2017


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Pension Funds

DWP announces new timetable

Under the proposed new timetable, the state pension age will increase to 68 between 2037 and 2039, earlier than the current legislation, which sees a rise between 2044 and 2046.

The change will affect everyone born between 6 April 1970 and 5 April 1978.

Latest projections from the Office for National Statistics (ONS) show that the number of people over state pension age in the UK is expected to grow by a third between 2017 and 2042, from 12.4 million in 2017 to 16.9 million in 2042.

The DWP said failing to act now, in light of compelling evidence of demographic pressures, would be irresponsible and place an unfair burden on younger generations.

Keeping the State Pension age at 66 would cost over £250 billion more than the government's preferred timetable by 2045/46.

Secretary of State for Work and Pensions, David Gauke, said: "I want Britain to be the best country in the world in which to grow old, where everyone enjoys the dignity and security they deserve in retirement."

"Combined with our pension reforms that are helping more people than ever save into a private pension and reducing pensioner poverty to a near record low, these changes will give people the certainty they need to plan ahead for retirement."

Today's announcement agrees with the timetable set out by John Cridland CBE in March 2017, which proposed bringing forward the increase in state pension age to 68 between 2037 and 2039.

The review highlighted that under the previous timetable, by 2036/37 annual spending on the state Pension would have increased by 1% of GDP on 2016/17, equivalent to £20 billion in today's terms – or a rise in taxation of £725 per household.

The Pensions and Lifetime Savings Association (PLSA) said the proposal will affect more than 7 million people in their late 30s and 40s.

Graham Vidler, PLSA director of external affairs, said: "This group is also those most at risk of inadequate private saving – they have not had the same access to final salary pension schemes as their parents and are too old to enjoy the full benefits of automatic enrolment that their children will see.

"We call on the Government to follow up on one of Cridland's other recommendations and provide access to 'Midlife Financial MOTs', which will help those people who need to work longer before they receive their state pension to make smarter financial choices to boost their savings."

First published 21.07.2017


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Pension Funds

Introducing Resilient Credit

To read this article click here

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Pension Funds

Opportunity points!

So many "to do" lists with so much still to do, it's not looking like it will all be done by Friday when I go searching for some sunshine on my two-week summer holiday.

Looking at my 'to do' list I wonder why some of these things are on there at all. Others seem to have been there for so long I'm sure it's already sorted or the opportunity is lost. Then there are the ones I just haven't had the courage to tackle.

They are important, very important, but all too easy to do tomorrow and not today. It's amazing how powerful a holiday deadline can be.

This will probably be my most productive week of the year. The scarcity of time provides enormous motivation and a pragmatic approach to getting things done and to remove from the list the things that will never get done.

So, if it's like this before holidays, what will it be like in the lead-up to retirement?

Getting your pension sorted, for many members, is one of those things that falls to the bottom of the list. It's our responsibility, as an industry committed to good member outcomes, to bring this to the fore and help members help themselves.

Whilst I am a big supporter of nudge theory, getting the structure of a scheme right – auto-enrolment and auto-escalation in place – is only part of the solution. On every member's journey, there are specific opportunity points at which the right decision can make a material difference to a member's retirement outcome. I call these points "POPs" – pension opportunity points.

It is at these points that communication is King. The right message, to the right person, at the right time, to drive the right action. POPs are specific to individuals. They require a deliberate communications strategy and excellent implementation over time to get the member's attention, develop their understanding and drive their action. Focusing communication around POPs reduces waste on communicating things that don't matter to members who, quite simply, are not interested.

In some ways, it's just like my 'to do' list, if I had someone to help prioritise the right decisions at the right time, I'd already be on holiday.

Peter Nicholas,Managing Director & CEO, AHC.

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Pension Funds

One in four not aware of government pension boost, according to BlackRock

According to BlackRock's Investor Pulse survey of 28,000 people worldwide and 4,000 people in the UK, half of Brits are unaware that the government contributes to pension savings outside of the state pension.

Some are potentially missing out on tens of thousands of pounds in retirement as a result, BlackRock said.

British people currently contribute around 2% of their annual salary (£27,000) into their pension, generating an extra £135 per year in contribution from the government through tax relief.

By increasing their payments to save 5%, they stand to gain £13,250 in pensions tax relief over 40 years, amounting to £28 a month.

The survey also showed that raising awareness of the tax relief the government provides to pension savers would entice some to put more away for their retirement.

A quarter (27%) said they would increase their regular contribution if they knew the government topped it up.

A general lack of understanding of basic pension terminology was also made apparent by the survey results.

Despite recent campaigns to increase awareness, half (48%) of the working UK population do not understand what auto-enrolment is, and two in five (39%) do not understand what a defined contribution pension is.

Claire Finn, head of UK DC pensions at BlackRock, said: "While it is surprising that half of Brits are not aware that the government already supplements their pension savings, our survey shows promise – people would contribute more if they knew the government was contributing too."

"With the cost of living going up, it can be hard to save for something that's years away, but every pound invested pre-retirement can have an exponential effect on what a person's life looks like in retirement."

Other survey findings include: the number of people saving for retirement has plateaued in the last two years with four in 10 saying they're not saving; of those not saving – two thirds do not have any pension provision in place and half are not saving because they do not have enough money.

The survey also found that technology is helping the education process – the use of online tools for monitoring progress is helping to change behaviour and improve people's confidence about retirement – one in 10 said using an online tool has been helpful when it comes to monitoring financial plans.

"Our survey shows education is paramount if we want Brits to be saving more, especially since we are all living longer and the responsibility of pension provision continues to shift from the state to the individual – and there are several levers that can be pulled," said Finn.

First published 13.07.2017


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Pension Funds

PQM announced consultation on future standards for DC pensions

The consultation will cover the Pension Quality Mark (PQM) for individual employer schemes and the Pension Quality Mark Ready (PQM Ready) for multi-employer schemes.

Closing on 4 August, the consultation is an opportunity for the industry to work together to deliver high quality schemes that benefit consumers, the PQM said.

Matthew Doyle, PQM managing director, said: "The consolation covers new topics, not previously part of the standards, including the duties of schemes and trustees as responsible owners, how diversity on trustee boards is measured and ensured, and external assessments of trustee board performance – as seen in the corporate sector."

Doyle added that with the capital trustees are overseeing in the master trust and multi-employer space, the new standards will introduce an "appropriately higher level of governance."

One key area the consultation is seeking feedback on, is whether scheme excellence should be judged on the employer offering, or the scheme member uptake.

The PQM is proposing to review and enhance the standards required to achieve the PQM and PQM Ready accreditations.

Areas covered by the consultation include: introducing ways to encourage employees to take up higher levels of employer matching contributions; increasing minimum contribution level; removing age bands for pension provision; reviewing fee cap levels; extending the standards to assess schemes approaches to corporate stewardship and environmental, social and governance issues; improving board performance through regular external assessment of trustee performance; and extending the PQM Ready standards to cover Group Personal Pensions (GPPs).

The new standards are set to be released prior to the end of 2017.

Since being launched, PQM (2009) and PQM Ready (2013) have become the highest accreditation available for the provision of individual and multi-employer DC pensions in the U.K.

However, since both were introduced there have been considerable developments in the DC market and, as a result, regulation and best practise now meet many of the PQM standards.

Chairman of PQM Adrian Boulding, said: "Over the last eight years the PQM standards have led the way in the development of good quality DC pension provision including the introduction of fee caps, which went onto be reflected in industry regulation."

"This consultation provides the opportunity for everyone in the pensions industry to shape the delivery of good quality DC pensions in the future."

First published 13.07.2017


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Pension Funds

Equal pension rights for same sex couples in landmark legal case

Retired businessman John Walker won equal pension benefits for his husband in a ruling by the UK's highest court.

He challenged an exemption in the Equality Act that allows employers to exclude same sex civil partners and spouses from benefits paid into a pension fund from before the Civil Partnership Act came into force in 2005.

The exemption will no longer apply and any companies taking advantage of it will be breaking the law.

David Brooks, Technical Director at Broadstone, said: "A great cheer should go up in the world on pensions today – the long-awaited ruling means that any schemes paying statutory minimum will now have to pay out the same benefits for all spouses and we no longer have to differentiate between the sexuality of beneficiaries."

The ruling may have implications across the sector, possibly seeing an increase in funding levels of both private and public sector schemes.

"The Government discussed this several times and it will be interesting to see if its reaction results in the predicted domino effect onto other pension inequalities, for instance around survivor benefits where GMP is involved," added Brooks.

The Department for Work and Pensions (DWP) opposed the case, alongside Walker's employer, chemicals company Innospec.

DWP argued that the cost implications for requiring all pension schemes to equalise entitlements retrospectively, could be £100million for private sector schemes and a further £20million for public sector schemes.

Former pensions minister Sir Steve Webb said the costs could indeed escalate: "Pension schemes will have to respond to this judgment, but new groups will come forward and say: 'I'm being treated unfairly... we want the same rights as well' - the difference between widows and widowers - for example."

The Supreme Court ruling was unanimous.

First published 13.07.2017


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Pension Funds

The next big thing or the latest gimmick – Cashflow Driven Investment

Any pensions textbook (I'm probably showing my age here, it's bound to be "online learning" or "app driven" now) will profess in bold with italic script, possibly underlined in red, that defined benefit pension schemes are a long-term investment vehicle and should be treated as such.

This all seems fine until we leave the exam hall with a sense of relief and a pass mark tucked safely under our arm?hurrying back to the office to get back to the "real-world".

In my experience, the most far sighted of pension scheme sponsors seem to regard five year projections as a "long-term" plan.

This, together with accounting standards requiring annual reviews and most Trustees needing an annual funding update, means that short term fluctuation creates anxiety - leading to an investment strategy concentrating on managing the short term at the expense of the optimal long-term position.

From the employer's perspective, a stable contribution requirement is clearly more desirable than a volatile pattern of a similar value.

Liability Driven Investment has long been a practical tool available to all but the very smallest of schemes by helping to remove the volatility in results, and I believe that this will continue to play a significant role in managing pension scheme finances and investment.

However, as schemes mature they will tend towards a cashflow negative situation. This will be exacerbated by an increasing number (albeit minority) of schemes moving towards a fully funded status with reduced or nil contributions.

The obvious risk of a cashflow negative situation is that assets need to be realised at a "low point" in the market, effectively locking in investment losses.

This can be addressed by simply holding more cash, but there are smarter ways to solve this problem - I predict that schemes will increasingly be looking to restructure their portfolios and use assets to generate an income stream that is aligned with their precited benefit outgo. This can be achieved via a variety of means including the use of;

• traditional investment tools such as bonds and, possibly, property classes;

• investment products structured around infrastructure investments, which are expected to generate income over the longer term; and

• investment products whereby investment houses "create" bespoke cashflows within a unitised investment vehicle.

I believe that the increased use of Cashflow Driven Investment will buy Trustees some time, having put the short term "to bed" and letting them turn their attention towards the longer term. Liability Driven Investment can manage interest rate and inflation rate risk, whereas Cashflow Driven Investment can deal with the short to medium term requirements.

This combination provides the "breathing space" for residual assets to be invested over a longer time horizon. This should provide the time for the "equity bet" to come good.

Written by Robert Palmer, Partner at Quantum Advisory

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Pension Funds

Trafalgar House calls for scheme literature update

Trafalgar House said more guidance is needed to compel trustees to update important scheme literature, such as member booklets.

Updating literature, it said, would avoid complications, confusion, and complaints from members.

Daniel Taylor, client director at Trafalgar House, said: "While guidance is in place that encourages trustees to regularly update the Trust Deed and Rules, the same does not apply for essential member communications like the explanatory booklet.

"Due to the lack of clear compelling guidance, many booklets have not been updated for years, sometimes decades – meaning they fail to accurately reflect important changes to the scheme.

"In the absence of up to date and accurate information, members are left asking questions and administrators have no choice but to rehash explanations from current copies of the deeds.

Taylor added that historically trustees could "hide behind" the protection of case law that has established a convention whereby the Trust Deed and Rules will be overriding if this is appropriately disclosed to members – usually somewhere within the membership booklet.

"This convention is letting members down, meaning that the only simple guide to benefits members have access to does not fully and accurately reflect the rules," he said.

"It is understandable that member booklets might slip down the trustee agenda following large projects such as scheme closures and changes to revaluation and sponsoring employers, but as the only document which fully explains the rules to members, it must not be neglected.

"Further guidance requiring trustees to update the booklet every five years, or immediately following a substantive change to the benefit basis, would certainly go some way to ensuring smoother administration processes and fewer complications for members."

First published 06.07.2017


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Pension Funds

Kames Capital launches new property fund

The Kames Active Beta Property Fund invests in a diversified portfolio of UK property funds.

Kames says it aims to match the return of the AREF/IPD UK All Balanced Property Funds Index with a low tracking error.

The fund will invest in a portfolio of commercial property funds that are constituents of the Index, with the fund managers taking small, risk-controlled active underweight or overweight positions against Index weights.

Phil Clark, head of Kames Capital's property investment business, said the Indirect property team has a track record of delivering investment performance for its clients and the new fund provides clients with an innovative way to access property returns.

The fund is managed by Tony Yu and Kames' head of indirect property Mark Bunney.

Yu said most small and medium sized pension schemes tend to access the property market through one or two balanced property funds, but investor returns from some individual balanced property funds have been damaged by redemption issues in recent years.

This has made it difficult for schemes to be confident in the long-term liquidity and performance prospects of a single fund approach.

"At the same time, over the past 10 years, we believe that many multi-manager and fund-of-funds approaches have incorporated too much leverage resulting in less liquid and more volatile returns than is desirable for UK schemes seeking a core exposure to the UK commercial property market," he said.

The solution, Yu said, is to invest in an actively managed diversified portfolio of open-ended balanced property funds – which will deliver returns with a risk profile appropriate for pension schemes seeking property market returns with an exceedingly low tracking error.

First published 07.07.2017


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Pension Funds

ONS says 20 million 'sleep-walking' towards a disappointing retirement

Alistair McQueen, head of savings & retirement at Aviva, said the figures are a wake-up call for young adults in the UK.

According to the figures, there are approximately 40 million working-age adults in the UK and half (54%) state they are confident that they will enjoy the income in retirement to which they aspire.

However, two-thirds (68%) have not thought about the number of years of retirement they may need to fund, and less than half (42%) said they understand enough about pensions to make decisions about retirement.

The employer pension is consistently seen as the safest way to save for retirement.

The appeal of employer pensions will have been boosted by automatic enrolment, which has brought eight million people into pensions since it was introduced in 2012.

Evidence suggests that most new savers are saving at minimum levels – currently 1% of employee salary, matched by 1% from the employer.

Alistair McQueen said: "Millions are sleepwalking into a disappointing retirement by failing to give proper thought towards their financial future.

"Financial confidence is a minority sport in the UK but support for all savers is critical, as is greater public awareness and understanding.

"Automatic enrolment is the savings vehicle that will carry most people towards their retirement - by staying in their auto enrolment scheme, ordinary working people are helping to build a more robust retirement.

"But even when minimum saving levels rise to 8% of salary in 2019, millions are unlikely to achieve the income in retirement that they would like.

McQueen added that the minimum levels should be raised towards 12.5% by 2028 to deliver against the expectations of many people.

First published 30.06.2017


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Pension Funds

Cybersecurity is not just an IT Problem

This season's hot administration topic is 'cybersecurity'.

Recent headlines, as well as the dawning realisation that pension schemes are sitting on massive stores of data, has finally woken everybody up to this very real and credible threat.

Pension administrators know a lot more about you than your neighbours, your insurer, your bank and maybe even your doctor.

We sit on information about your employment, earnings, relationships, bank accounts and sometimes even your health.

What was once paper and manual is now digital. What was once calculated, checked and validated by trading letters is now done through the exchange of electronic data.

Today, employers, administrators, actuaries, members and other specialist service providers are continually processing and transferring personal data.

What makes this threat more acute for administrators is that the volume of data we are amassing has grown exponentially over recent years.

The universal adoption of electronic document management, workflow, and, to a lesser degree, digital communications means that it's not just a core set of factual employment and benefit data we record electronically – it's every single exchange, letter, comment and email ? all stored, indexed and linked to a person's record.

As the volume of data grows exponentially, so do the opportunities to use it.

But, if preventing cybercrime is on your 2017 to-do list, then don't be fooled into thinking it's just an IT issue that can be resolved by some clever computer wizardry – it can't. Preventing cybercrime is not just an IT issue.

If you want to prevent your house being burgled, you may put a sturdy lock on your front door. But, if you invite the burglar in, leave the door open or give a thief a job fixing a shelf inside your home, the lock is a worthless piece of decoration.

The exact same principle applies to preventing cybercrimes. As with all crime prevention, it requires prevention policies, training and ongoing management.

According to IBM's Cyber Security Intelligence Index, 55 per cent of cyber attacks are committed by 'insiders'. Caused by either malicious insiders or inadvertent actors (people who either inadvertently give attackers access to data or fail to follow cybersecurity policies), most cybercrime will be instigated or facilitated by trusted people who are already known to you.

It's now widely thought that the recent highly-publicised WannaCry attack that brought swathes of the NHS to a standstill could have been prevented had policies on keeping operating systems up-to-date been followed properly.

The technology existed to stop this attack, but it was a failure to follow policy that left the door wide open.

So how should anyone who wants to engage with cybersecurity issues be approaching this problem? We believe a five-step approach is needed:

1. Add cyber security to the risk register. In a very good analysis published recently by RSM (RSM Pensions Fraud: sleepwalking into a crisis), it is revealed that around a quarter of trustees simply don't recognise they are responsible for fraud detection and prevention.

More worryingly, they go on to point out that nearly a third of internal controls don't cover cybercrime. As the adage goes, what gets measured gets managed – make sure cybercrime is a visible risk that is assessed and discussed.

2. Appoint a trustee responsible for management and monitoring of the risk. Preventing cybercrime involves looking at processes, training and systems. It's virtually impossible to do this via a committee so appoint one person who can spend time understanding and reviewing the risks and mitigation strategies.

3. Check that the internal controls of the trustee board and its advisers cover cybersecurity risks.

4. Ensure that internal controls are being regularly checked and, ideally, audited externally. There are several different assurance frameworks administrators use to document and test their controls – AAF 01/06 tends to be the most widely used and respected.

Whichever framework your administrator uses, make sure the necessary controls are in place and ensure they are getting regularly audited by external consultants.

5. Test, test and test again. Vulnerability and penetration tests are used to identify and exploit vulnerabilities to determine what information is actually at risk. They are an essential part of establishing whether controls and systems actually work.

Make sure your advisers are performing these and ask for copies of the results. Because of the speed with which threats and risks change in this area, it's unlikely any test will give 100 per cent coverage but the testing will demonstrate that your provider is alive to these threats and is actively working to protect their infrastructure.

Written by Daniel Taylor,Client Director,Trafalgar House.

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Pension Funds

Retirement income gender gap grows by £1,000

The annual research which has been collected over the last decade, tracks future financial plans and aspirations of people planning to retire in the year ahead.

This year's figures show that women expecting to retire in 2017 will be nearly £6,400 a year worse off on average than their male counterparts, and nearly £200 a year worse off than women who retired in 2016.

Women this year expect an average annual retirement income of £14,300, which is the second highest on record although slightly down on the £14,500 for those retiring in 2016.

This year's female retirees are feeling slightly more confident about their finances, however, with 50 per cent saying they are financially well-prepared for retirement, compared with 48 per cent in 2016.

Meanwhile, as women's incomes stagnate, men's expected retirement incomes have shown a fifth consecutive year of growth.

Men retiring this year expect an annual retirement income of £20,700 – £900 a year more than last year which is helping drive the gender gap to its highest level for three years.

The Prudential study, which has tracked the retirement income gender gap for 10 years, shows that men retiring this year will be 45 per cent better-off than women.

The gender gap was at its widest in 2008 when the average expected retirement income for men was 84 per cent higher than that expected by women.

Kirsty Anderson, a retirement income expert at Prudential, said: "It is encouraging that many women planning to retire this year feel financially well-prepared for their years in retirement. In fact, women's expected retirement incomes this year are the second highest on record.

"However, the gender gap in retirement incomes continues to grow, probably reflecting the fact that many women will enter retirement having taken career breaks and changed their working patterns to look after dependants.

"Unfortunately, as a result, many women will end up with smaller personal pension pots and some are also likely to receive a reduced State Pension."

"However, with a greater number of women staying in the workforce for longer these days, and employers increasingly offering more flexible working patterns, the outlook is more positive for women's retirement incomes in the future."

First published 30.06.2017


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Pension Funds

FCA publishes final report into asset management sector

It has also announced a package of reforms to address concerns identified in its interim report to the sector.

The interim report was published last year and it found, despite many firms operating in the market, there is evidence of sustained high profits over several years.

The report also found that price competition is weak in several areas and that investors are not always clear what the objectives of funds are.

It found that fund performance is not always reported against the appropriate benchmark, and the FCA found concerns about the way the investment consultant market operates.

The final report confirms these findings.

Andrew Bailey, chief executive at the FCA said: "The asset management sector is important to the economy, managing the savings of millions of people and in the current low interest environment it's vital we help people earn a return on their savings.

"We need a competitive sector, attracting investment into the UK that also works well for the people who rely on it for their financial wellbeing."

The Pensions and Lifetime Savings Association (PLSA) said that pension funds are some of the investment management industry's largest clients.

Graham Vidler, PLSA director of external affairs, said: "We have been calling for greater cost transparency and expressed concerns about cost levels for some time.

"These issues ultimately impact the value of people's retirement savings and we therefore welcome the FCA's commitment to address the serious issues facing the market."

The FCA's proposed reforms fall in to three areas:

• To help provide protection for investors who are not well placed to find better value for money
• To drive competitive pressure on asset managers
• To help improve the effectiveness of intermediaries

The implementation will take place in several stages, some do not require consultation and are now being taken forward.

The FCA has published a consultation paper, focussing on the remedies related to governance and technical changes to promote fairness for investors.

Vidler said: "We strongly welcome the FCA's commitment to working with the DWP to remove barriers to consolidation and pooling.

"Institutional investors, however large and however well-governed, need a competitive, transparent market to deliver the best outcomes for their members."

First published 30.06.2017


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