Pension Protection Fund changes investment criteria
The Pension Protection Fund (PPF), the safety net for the UK pension fund members, has today announced plans to widen its investment criteria to take in new areas of investment. Currently the PPF has a portfolio of around £4 billion which is predominantly invested in cash and bonds. The current benchmark target return for the fund is around 1.4% although this will be increased to 1.8% over the next 12 months when the range of investments eligible for the fund will be expanded.
There has been specific talk of investment into private equity firms and infrastructure projects in the UK which would complement the current investments and increase investment returns over time. However, the proposed investment into private equity firms is controversial because the UK authorities have been cracking down on this sector amid claims of undue risk taking and high remuneration and bonus packages. In reality the truth is that without private equity firms many companies in the UK would struggle to survive as not only do they offer capital but they also offer experienced business advice as well.
There is no doubt that the PPF will face more challenges and more pressure in the future as pension fund deficits in the UK continue to rise with more and more employees becoming concerned. There is talk in the longer term of reducing the levy on UK companies which funds the PPF and relying more upon investment returns from a fund which is expected to increase from £4 billion this year to £10 billion in the short term.
Share this..
Related stories
Global pension schemes fall in value by £3.8 trillion
Respected consultancy and actuaries Watson Wyatt has today revealed figures suggesting that global pension arrangements have fallen in value by some £3.8 trillion over the last year. While the UK sector has had a very difficult time to say the least it would appear that the worldwide sector has performed considerably worse and there are serious concerns about the ongoing gap in pension liabilitie...
Read MorePersonal finance 'scarier than terrorists'
Britons are more concerned about their own financial situation than the threat of a terrorist attack, a new survey claims.According to bank Abbey, climate change and everyday crime also cause much fewer sleepless nights than money worries.Today's research shows that finances are perceived as the biggest threat to the quality of life in the UK by 24 per cent of respondents.In contrast, 11 per cent...
Read MoreUK government to introduce pension fund changes
The UK government is set to introduce changes to the UK pension fund system which could severely impact the value of final salary pension schemes in the UK. Only hours after BP chief executive Tony Hayward left the group with a rumoured £600,000 a year pension the government is set to reduce the maximum amount which can be sheltered in a pension scheme in any one year. Apparently the government i...
Read MoreAre your pension charges too high?
In 2001 the UK government introduced stakeholder pensions. The idea was that everyone should have the option of taking out a new personal pension with only a single annual management charge. Initially, this was limited to 1% of your fund value each year, but was increased to 1.5% for the first 10 years of the new plan. This meant that each contract would, for example, charge you £10 in a year...
Read MoreFears arise over pension mis-selling
12/02/2015 The pension reforms being introduced in the UK in April will lead to an abundance of mis-selling claims, according to an announcement from Scottish Friendly. Scottish Friendly, a savings and ISA provider, believe large numbers of pensioners will be targeted by salespeople with the only aim to separate them from their life savings. They believe more needs to be done to ensure pens...
Read More