UK - The Sandler Report on retail investing fails to to encourage savings among lower earners, according to Mercer Human Resource Consulting.
Mercer broadly welcomed the creation of a “simpler” market for consumers, but said that the proposals lacked “radical measures” needed to encourage people to save, especially those on a lower income.
European Partner at Mercer Tim Keogh said: Good on Sandler for flagging up that what goes for the industry goes for the Chancellor as well. We've seen how tax break changes just move savings rather than increase them ... .
It's disappointing that [he] has not proposed any radical new measures that will actively encourage people to save. In this respect, his proposals will not extend savings coverage - people on lower earnings have limited ability to save, and will certainly not do so if means testing reduces the benefits. Sandler says the Pensions Credit will solve this problem - we do not agree as it still offers a 40% marginal tax rate to poor pensioners.”
But Mercer added that the Report was still likely to benefit existing savers:
If this means a reduction in the number of providers and products in the interests of efficiency, so be it. Let us hope the detailed implementation does not spoil that vision, added Keogh .
Mercer also warned that the inclusion of a compulsory fixed interest component in managed funds was “wrong”. UK Head of Mercer Investment Consulting Andrew Kirton said: Among other things, it means that many existing stakeholder pensions established by employers and with carefully thought out investment strategies would no longer meet the criteria. This cannot be a sensible step forward.”
By Madhu Kalia
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
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Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.