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Welfare Reform on the Web (August 2010): Pensions - UK

Academics to face pensions cutbacks

N. Timmins

Financial Times, July 8th 2010, p.3

The decision to end the final salary pension scheme for university academics will adversely affect more than 100,000 people according to their union, the UCU, which say the move will 'inevitably' lead to industrial action.

BBC unions warn of pensions strike

Anon

Financial Times, July 20th 2010, p.4

Leaders of five unions representing BBC staff have said that unless BBC management gives a guarantee by 21 July that the value of pensions already earned will be protected and plans to impose 'punitive' changes to the pension scheme abandoned, thousands of staff will be balloted on strike action.

Change to wipe 25% off final salary pensions

M. Butterworth

Daily Telegraph, July 9th 2010, p.1

The coalition government has announced plans to change the measure of inflation used to calculate rises in private sector final salary scheme pension payments. From 2011, payments will rise in line with the Consumer Price Index, which excludes housing costs, instead of the Retail Price Index. The move means that millions of pension holders will be out of pocket because of the change.

Deficit in final salary pensions set to reach record high in year

M. Butterworth

Daily Telegraph, July 2nd 2010, p. 6

A report by Aon Consulting has warned that the deficit in Britain's largest remaining final salary occupational pension schemes will reach a record 140bn within a year. Accountants have suggested that companies will respond by either closing down schemes altogether or reducing the benefits that existing members can accrue.

Forced retirement at 65 to be scrapped

The Times, July 29th 2010, p. 3

R. Bennett & J. Sherman

Proposals announced today have suggested that the compulsory retirement age of 65 be scrapped next year. Under the present law an employer must present written notification of retirement 6 months before an employee's 65th birthday. The charity Age UK has welcomed the news as a victory in the battle against ageism.

Generation aiming to work forever

M. Butterworth and H. Wallop

Daily Telegraph, July 30th 2010, p.8

A survey for the HSBC Bank of 2,000 people over 50 shows that 55% of respondents did not anticipate stopping work completely. Most blamed a need to fill a shortfall in retirement income, but many were looking to embrace new challenges and acquire new skills.

Local government pensions in England: an information paper

Audit Commission

2010

The Local Government Pension Scheme is made up of 79 separate funds and has 1.7 million active members. It is in need of urgent reform as its 130bn assets only cover about three quarters of its liabilities. The gap will widen unless action is taken, and the report suggests that the scheme should raise either employee contributions or the age at which pensions are

Pension review to focus on annuities

N. Cohen

Financial Times, July 16th 2010, p.2

Treasury proposals published on 15 July mean people aged 75 plus would no longer need to use their pension savings to buy an annuity, if they can demonstrate they will not run out of funds before they die. The consultation document also proposes that individuals should be able to choose when and how to turn pension savings into retirement income, provided they can show they will not run out of money.

Phasing out the default retirement age: consultation document

Department for Business, Innovation and Skills [and] Department for Work and Pensions

London: 2010

This consultation proposes phasing out the default retirement age which allows companies to force staff to retire at 65 from April 2011. Compulsory retirement at 65 would become illegal on October 1st 2011 except in fields such as the police and air traffic control. Certain employers would be allowed to operate a compulsory retirement age as long as they could justify it objectively.

URL: http://www.bis.gov.uk/assets/biscore/employment-matters/docs/p/10-1047-default-retirement-age-consultation.pdf

Plan for emergency access to pensions

C. Hope

Daily Telegraph, July 14th 2010, p. 1 + 2

Reports that the pensions minister is considering allowing people early access to their private pensions if they are in dire financial need. Private pensions can normally only be accessed on retirement from the age of 55.

Reforming public sector pensions: solutions to a growing challenge

Public Sector Pensions Commission

The Institute of Directors, 2010

This paper presents the work of the Public Sector Pensions Commission, laying out a realistic set of options for reform of the present unfunded public sector pension arrangements. With ever-increasing longevity, reform is necessary to ensure that public sector pensions remain financially sustainable for the long term. The report finds that public sector pensions are worth, on average, at least 40 per cent of salary, warns that contributions may need to rise sharply if benefits remain unchanged and sets out a menu of options for reform.

URL: http://www.public-sector-pensions-commission.org.uk/wp-content/themes/pspc/images/Public-Sector-Pensions-Commission-Report.pdf

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