Mixed blessings

Article Abstract:

The Minimum Funding Requirement (MFR) was introduced to help members of UK company pension schemes, but may actually damage their interests. The MFR is included in the 1995 Pensions Act and aims to ensure that liabilities of pension funds are covered by assets. The MFR could lead companies to invest in assets that involve less risk such as bonds, moving away from equities. This could affect returns on investments. The MFR does not apply to money purchase schemes which could become more popular as employers move away from final salary schemes which are affected by the MFR.

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Advisers in the doghouse

Article Abstract:

Some United Kingdom independent financial advisers (IFAs) gave the wrong advice on personal pensions, although they should have the interests of clients as their main priority. IFA networks argue that there are fewer cases of mis-selling involving IFAs than direct and tied distribution methods. DBS Financial Management chairman, Ken Davy, argues that most mis-selling cases relate to 1988 to 1994 so the problem is historical. IFAs face particular problems such as a large number of accumlated cases, but pensions should not have been mis-sold in the first instance.

Investment advice, Investment Advisory Services, Investment advisers

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The final salary frontier

Article Abstract:

There are two main types of company pension scheme in the United Kingdom, money purchase schemes and defined benefit schemes. Company schemes usually offer better returns than investing in a personal scheme, but investors may be undecided about which type of company scheme to choose. Money purchase schemes can benefit from good investment returns if they are started early. Final salary expectations also affect this decision, and portability may be an issue for people who may leave early.

Personal Financial Mgmt, Management, Personal finance

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