Finance Matters

• 03Jul

  Regulator explains approach to risk transfers in changing landscape

  Pensions No Comments

  From The Pensions Regulator:

  Today the Pensions Regulator published new guidance and a

  In line with the regulator’s approach to educate and enable, and to enforce only as a last resort, a new module to the

  Bill Galvin, executive director for strategic development at the regulator said:

  “In setting the framework for pension risk transfers, we have endeavoured to enable trustees and their sponsors to manage responsibly any transfer of this risk away from sponsor balance sheets.

  “At all times, where the risk is transferred to another entity, trustees must be certain that there is no reduction in member security. Where the risk is transferred to the individual member, trustees must take all reasonable steps to ensure members understand the risk they are being asked to take on and the value of the benefit they are foregoing.”

  The toolkit module is…

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• 03Jul

  Prudent funding targets are key to the health of pension schemes

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  From The Pensions Regulator:

  The Pensions Regulator today publishes a

  Following a series of nationwide funding workshops, the regulator is setting out its approach to scheme funding valuations and the importance of the employer covenant through the economic downturn.

  This message is reinforced with a series of online

  Chair of the Pensions Regulator, David Norgrove, said:

  “Where sufficient prudence has been built into funding targets, a sensible consideration about the length of the recovery plan and schedule of annual payments can occur.

  That’s the balance we need to strike to best secure member benefits for the long-term and to enable employers to play their part in the economic recovery.”

  The key points in today’s statement ‘Scheme funding and the employer covenant - prudence, affordability, applying…

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• 03Jul

  Scheme funding in the economic downturn – free national workshops

  Pensions No Comments

  From The Pensions Regulator:

  The Pensions Regulator will hold free workshops throughout the UK this summer to reaffirm the approach to DB scheme funding in the economic downturn.

  David Norgrove, chair of the regulator said: “These workshops are an opportunity for our regulated community to engage directly with the regulator as we continue to communicate openly in these difficult times.”

  Looking ahead to the workshops in June, chief executive Tony Hobman said:

  “Now, more than ever, it is crucial for trustees to base their funding targets on prudent assumptions which take full account of the strength of the employer’s ability to underwrite the risk. In particular, where an employer has a weak or weakening covenant, we expect trustees to ensure that this is reflected when setting the scheme’s technical provisions. In some cases this will result in a higher funding target but trustees must not all…

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• 03Jul

  Pensions Regulator - Pragmatic and proportionate as new code on ‘material detriment’ moves forward

  Pensions No Comments

  From The Pensions Regulator:

  Pragmatic and proportionate remain the Pensions Regulator’s key principles in its approach to amended anti-avoidance powers - as detailed today in our

  We received 29 formal responses to our eight week consultation. Responses were generally supportive of the new code. Says Pensions Regulator chief executive, Tony Hobman: “In response to feedback, we have made changes to ensure the code is clear and that it interacts well with other rules and regulations. We’re not expecting any undue impact upon routine business and we thank respondents for the feedback.”

  The new code sets out where the regulator expects to issue contribution notices on the basis of the ‘material detriment test’ and it is unlikely to affect the majority of sponsoring employers.

  The code is one of the safeguards for those acting responsibly towards their pension scheme. The consultation response looks…

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• 03Jul

  Alert to risks in the downturn - statement by the Pensions Regulator

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  From The Pensions Regulator:

  Today the Pensions Regulator issued a statement to the regulated community,

  We recognise the vast majority of schemes are well run by dedicated individuals; this statement is intended to alert the community to potential risks, and to encourage trustees and other pension managers to contact the regulator if they are worried.

  The statement also reminds the regulated community of the important role of whistle-blowers, and seeks to reassure the regulated community that where necessary the regulator will take sanctions against unacceptable behaviour.

  Tony Hobman, Chief Executive of The Pensions Regulator, said:

  “In these tougher times, we will continue to monitor the economic situation and, along with our partners, to continue to focus on the key risks in the system to ensure that the promises made in pensions are upheld….

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• 03Jul

  Pensions Regulator - equipped and ready for the downturn

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  From The Pensions Regulator:

  Continuing to improve the way we work in order to provide better and more efficient services, and striving to deliver more for less, are two of the themes reported in our

  Examples of our better working include our online scheme maintenance system, Exchange, which allows information - such as registering a new occupational scheme, or making changes to scheme details - to be sent electronically, instead of previous paper based requirements.

  Other positive developments include the provision of more resources for the Employer Compliance Regime.

  And doing more for less includes the efficiency savings of 5 percent year on year that we have made.

  Our corporate plan also reflects the pressures that trustees and employers are facing in the present economic climate. We are moving resources to areas that may need extra support….

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• 03Jul

  MPC man Miles says house price falls over

  Mortgages No Comments

  From This is Money:

  Professor Miles, who first predicted in 2006 that the market would crash, said that sentiment was improving in the property market and that buyers, wielding higher deposits, would return.
  He also made an accurate forecast of a 20% fall in early 2008.
  He said: ‘Expectations are crucial in the housing market and they look a bit better now than a few months ago. My hunch - and I put it no stronger than that - is that we have seen most of the overall aggregate house price falls.’
  Prof Miles spoke to MPs at a Treasury Select Committee hearing on his appointment to the MPC.
  His optimism echoed figures from Nationwide earlier this week that showed prices rose in June for the third time in four months.
  Professor Miles was appointed to the MPC having previously authoring Government-commissioned reports on the mortgage market in 2003 and 2004.
  His Miles Review sent out an early warning that the focus in the mortgage market was not long term enough, cautioning that borrowers were fixated…

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• 03Jul

  Britons slash mortgage debt as prices fall

  Mortgages No Comments

  From This is Money:

  The Bank has reported that borrowers reduced the size of their mortgages by a combined £8.14bn in the first quarter of 2009. It is the fourth quarter in a row that equity withdrawal has been negative.
  Homeowners’ focus on paying down their mortgages is in stark contrast to figures for the same period of last year, when people released £6.73bn from their properties to fund large purchases, although this was itself the lowest figure for six years.
  Equity withdrawal enables homeowners to cash in on rising house prices by increasing their mortgages to convert some of the rise in the value of their home into cash. Falling house prices act as a disincentive for borrowers to remortgage.
  House price falls of more than 20% since the market peaked in July 2007 also mean many people no longer have sufficient equity left in their property for them to withdraw.
  The credit crunch has also led to banks and building societies tightening their lending criteria, making it more difficult a…

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• 03Jul

  How to buy a bargain home in a slump

  Mortgages No Comments

  From This is Money:

  Taking the temperature of the property market can be a tricky but when estate agents talk of a buyers’ market those hoping to bag a good deal should listen up.
  The property slump has led agents to drop prices, auctioneers to set lower reserves and sellers to realign expectations.
  But negotiating the best price and working out whether a property is a good deal is still a hard task
  However, if buyers can purchase without over reaching themselves and are willing to accept their asset may dip in value, the slump represent an opportunity to perhaps bag a bargain home.

  The tough market

  House prices were down 16% in the year to June 2009, on the Halifax index, and 22% from the peak of August 2007.

  Mortgage approvals and home sales dived and hit a low point in late 2008/early 2009, they have picked up since then, indicating that activity, if not prices, has bottomed out.
  For the latest on the property market read: What next for property prices?
  If you do decide to buy now, make…

  Click to read the full article »

• 03Jul

  Nationwide: House price falls in single digits

  Mortgages No Comments

  From This is Money:

  The cost of an average home has risen by £8,700, or 5.9%, since hitting a low of £147,746 in February. However, this remains 16% below the peak of £186,044 in October 2007.

  Nationwide said property prices rose during June - by 0.9% - for the third time in four months, as a shortage of properties being put up for sale continued to restrict supply.
  The three-month rolling average, a less volatile figure than monthly data, is now also in positive territory, showing a rise of 0.9%.

  The figures follow a succession of reports from estate agents and the Royal Institution of Chartered Surveyors showing a dwindling supply of property available, while buyers’ interest rises.#

  Due to the way that figures are seasonally adjusted, March’s Nationwide index reported prices falling by 0.3%, when the average home rose in price by just £1,000.

  Non-seasonally adjusted Nationwide figures show four successive months of rises, with the average home gaining £8,696…

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