spotlighton pensions spotlighton pensions - MMC UK Pensions

More documents

Recommendations

Info

6Last year, the Government commissioned AlanPickering, former National Association of PensionFunds Chairman, to review whether the increasingreluctance of employers and individuals to makeadequate pension provision could be addressed bysimplification of the system. The resulting reportcovers a range of issues from minor administrativeirritations to major barriers and, with the Sandlerreport on retail savings, and the Myners report, couldinfluence the Government's reform agenda.The Pickering ReportIn his 82 page report issued on 11 July 2002, AlanPickering’s objective was to identify ways to make iteasier for employers to provide good quality pensionsfor their employees, easier for commercial providersto sell appropriate products to appropriate people,and easier for individuals to accumulate pensionbenefits. His report considers the detail of the 1995Pensions Act and offers suggestions for reforms tosignificant parts of the underlying structure, forinstance the abolition of the current level ofguaranteed pension increases and spouses’ pensions.He offers a vision of an approach to regulation basedon professional judgement and a regulator focused onpractical outcomes rather than compliance that endsup just box ticking.The Government has considered the proposals andresponded in a Green Paper in December 2002. TheGreen Paper also covers wider pensions issues, whichit is hoped will include detailed proposals for thereplacement for the Minimum Funding Requirementwhich applies to final salary pension schemes like theMarsh Mercer Pension Fund and for simplifyingInland Revenue restrictions on pension schemes.We will report on the Green Paper in our next editionof Spotlight.Some of the simple changes can be implementedrelatively quickly within existing legislation. However,the more substantial changes need new legislation.Following on from this, some quick changes could takeplace during the 2002/3 parliamentary year, whichcould come into effect from 2004. Other changeswould take at least a year longer.The changingworld of pensions -A summary of recent reportsdesigned to reform thepensions industryThe Sandler ReportIn parallel with the Pickering Report, the SandlerReview of Medium and Long-Term Retail Savings hasrecommended reforms to the retail savings systemdesigned to make it simpler and more customerfriendly. The new products suggested by Sandler areintended to bring the stakeholder pension approach -low charges and user friendliness - to other savingssuch as unit trusts and ISAs. The Review wasrecommended by Myners in his review of institutionalinvestment.The Government announced this Review, headed byRon Sandler, on 18 June 2001, with a remit to"identify the competitive forces and incentives thatdrive the (retail saving) industries concerned, inparticular in relation to their approaches toinvestment and, where necessary, to suggest policyresponses to ensure that consumers are well served.The Myners ReportThe Myner's Review, published in 2001, makes anumber of recommendations about how trustees ofpension funds might improve their investmentdecision-making process. The Government has takenforward most of these recommendations and hasencapsulated them in a Code of Best Practice forpension schemes. The emphasis is on ensuring thattrustees have the right skill set and decision-makingstructures. Trustees need to have clear objectives fortheir schemes and an appropriate and welldocumented strategy in place for achieving theseobjectives. In a similar vein, trustees should setexplicit goals for the fund managers which theirscheme uses.
The Fund already complies with most of theprinciples which form the Code of Best Practice. TheInvestment Committee is also considering furthersteps which it could take in order to comply moreclosely with the Code.We will keep you up to date with progress andreaction in future editions.New option -For Additional VoluntaryContributionsThe Trustee introduced a new option for theinvestment of Additional Voluntary Contributionsfor members in October 2001. The new optionoperates on a ‘manager of managers’ basis, and isoverseen by Escher UK, a leading player in thismarket. The funds are therefore called TEAMS (theEscher Asset Management Scheme).This new option is an additional retirement planningvehicle for Final Salary benefit members which allowsyou to save for your retirement. It is a long-terminvestment designed to provide you with an incomewhen you decide to take the benefits, usually at thesame time that you take the benefits from the MarshMercer Pension Fund.You may choose from a range of TEAMS funds set outopposite. You may choose to invest in just one or acombination of funds.✭ TEAMS UK Equities 2% Outperformance Fund✭ TEAMS Overseas Equities 2% Outperformance Fund✭ TEAMS Global Equities 2% Outperformance Fund✭ TEAMS UK Equities 1% Outperformance Fund✭ TEAMS Overseas Equities 1% Outperformance Fund✭ TEAMS Global Equities 1% Outperformance Fund✭ TEAMS UK Equities Tracker Fund✭ TEAMS Overseas Equities Tracker Fund✭ TEAMS Global Equities Tracker Fund✭ TEAMS UK Bond Fund✭ TEAMS Fixed Interest Tracker Fund✭ TEAMS Index-Linked Tracker Fund✭ TEAMS Cash FundThe fund(s) in which you choose to invest yourcontributions will depend on your personalcircumstances, your retirement plans and the degreeof risk you are prepared to take.All the funds are managed by a range of externalinvestment fund managers that are appointed byWinterthur Life on the recommendation of EscherUK. The investment managers’ performance isregularly monitored and reviewed by Escher UK andfrom time to time (when considered appropriate), theunderlying managers will be changed.Performance objectives are set for each fund, whichthe fund managers should aim to achieve, beforededucting fees, measured over rolling three-yearperiods.If you would like further information about the newAVC option please contact the Pensions Departmentusing the details on page 18.The Trustee has also been reviewing whether allhistorical AVC arrangements remain appropriate andwill be contacting you directly if you have AVCs withany of the previous providers.7
Page 8 and 9: Financial highlights -Trustee’s r
Page 10 and 11: Investment newsFinal Salary benefit
Page 12 and 13: 12The Trustee ......Trustee boardCo
Page 14 and 15: 14Pensions Forum ReportWe detail be
Page 16 and 17: Changes behindthe scenes -A profile
Page 18: Keeping in touch -Useful informatio

spotlighton pensions spotlighton pensions - MMC UK Pensions

Create successful ePaper yourself

Delete template?

Save as template?