Have a safe Ian Price. Divisional Director - Pensions

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1 Have a safe Ian Price journey Divisional Director - Pensions

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3 I ve got all the money I need for my old age.provided I die by 4.00pm this afternoon. Groucho Marx

4 The World Is Changing! It will become normal for two generations to be retired, how will we cope with this Financial i Planning will become the key. Ian Price, March 2009

5 How Are We Doing? Average fund at retirement 30, Source: ABI 2009

6 Do you remember? 1) Take maximum cash free tax 2) Buy an annuity 3) Die at some point!

7 Without proper planning and long term thinking about pension provision, we could be storing up a major social problem for future generations Source: L.C.P LLP Accounting gfor Pensions 2010

8 The idea of someone being fired just because they are 60 or 65 is nonsense Source: Iain Duncan- Smith - Work & Pensions Secretary, Pensions Week 31 st May 2010

9 Everyone needs to take responsibility for achieving the income in retirement they aspire to Source: Iain Duncan- Smith - Work & Pensions Secretary

10 BBC slashes staff pension benefits and public sector workers are warned: You re next Source: Becky Barrow, Daily Mail, 30 June 2010

11 Where does this leave Public Sector Schemes? John Hutton will decide!

12 Linking Pensions to CPI Breaches Human Rights Philip Read the Chairman of British Coal Pension Trustees said the plans were a potential nightmare Source: Telegraph, 11 August 2010

13 FTSE 100 reported UK liabilities could fall by as much as 30 billion if RPI were to be replaced by CPI L.C.P LLP Accounting for Pensions 2010

14 What are we seeing happening? Increased cost to members BA same contribution i reduced d accural rate Move to career average earnings Pensionable salary increases capped within DB full salary pensioned with DC world Retirement age?

15 What are we seeing happening? How do employers react to these changes? More schemes DB looking to wind up What advice should be given? -Employer -Trustee -Member

16 HMRC Proposals High level! New contribution limit 30k- 45k, what will it be? What factors will be used for DB members? Lifetime Allowance potentially reducing from 1.8m - 1.5m No need to purchase an annuity Changes to tax rate on death whilst in Drawdown 55%

17 What are the key issues to be resolved? Communication is and will be the key! How do we give advice to: -Employer -Trustee - Member Need to understand what rules are

18 Employers point of view? More changes! Impact of changes to contribution limit and Lifetime Allowance What do they do about potential liability on employees re: contribution limit DB This must be another nail in the coffin! What do they do with older employees? Looking to reduce liability on DB schemes

19 Trustees point of view? More changes! Worried about the tax implications on employees re: contribution limit Impact of CPI rather than RPI Worried that the scheme will shut How to communicate to the members Where next?

20 Members point of view? More changes! Potential tax liability on contribution and fund above reduced d Lifetimei Allowance Can someone explain the rules? Should I opt-out? Should I move from DB to DC? How long will I have to work?

21 Thoughts and concerns Each individual will need advice good for us Tax liability is an individual issue real concerns about this The constablestory Employers/Trustees worried about the scheme Employer - Costs and Trustees Closure of the scheme Public Sector There will be change, limited options, pension age, individual contributions Change to pensionable salary

22 Thoughts and concerns Need clarity re; the rules Need the age factor to work at DB employer contribution i Hopefully no change in Lifetime Allowance Like simplification Communication and advice will be key Watch this space

23 2011 and beyond Pension / ISA Pension 40,000 Pension 24,000 ISA 10,200 ISA 10,200 Gross 50,200 Net 30,200 Simple?

24 Pensioners weren t born yesterday. Ian Price, Money Marketing Feb 2008

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