Friends Provident Sell Off Part Of Their Pension Fund
In a move which is becoming more common in the world of pensions it has been announced that Friends Provident has sold off part of its final salary pension scheme in a move which will limit their liabilities for the future. The transfer of the pension arrangements for some 3,200 pensioners to pension fund specialist Paternoster will leave the company to concentrate on their core business.
The demise of the final salary pension scheme has hit many companies hard with outdated actuarial figures thrown out of the window. People are now living longer and of late investment returns have not been what analysts had been forecasting. Many people are also blaming the change in taxation some years ago which saw pension fund income taxed as normal, rather than receiving the tax free status they had enjoyed for so many years.
The impact upon the taxation issue cannot be underestimated because not only does it impact upon the year the tax is deducted but it also means less money for reinvestment which reduces future returns dramatically. The move by Friends Provident will not be the last of its kind and is set to become a common feature in the future.
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