Page 21 - BOSS Today Issue 2

pensions focus

n the 1670s, coffee houses were with five employees or more, years service for a small deduction BOSS members will receive updated
becoming popular meeting contributions were voluntary and from salary, and you got your state information on the progress of
Iplaces, the first recorded wine take up was poor. The Stakeholder pension too. Given such a generous Pension Reform from the BPIF by
auction was held in London and the became just another type of pension offer, many people signed up way of their pension advisers. BOSS
first organised pension scheme was scheme to add to the growing list. without thinking too hard about it. will have its own industry pension
being designed for officers of the And so to the present. There Nowadays, pension plans tend to scheme, employers will have
Royal Navy. Average life expectancy are two problems: people are be a lot less generous, and people assistance with registration, and all
in those days was only 48 years, so not putting enough into pension weigh up the pros and cons more pension advice will be free to both
the scheme trustees didn’t have to plans: according to research by stringently. employer and employees.
worry about being swamped by Datamonitor in July 2009, 72% of And then there are the And there’s something else we
claims. people do not have a pension plan demographics to consider. There is can help with. The DWP wants
In the 1970s, meetings were in place. That’s an estimated 10 growing concern that the ratio of every employee to receive a State
still being held in coffee houses million people between the ages those in work to those in retirement Pension Forecast, so as to get a better
(although they had undergone of 18 to 65. And life expectancy will decline during this century to a understanding of the State Pension
a few makeovers in the previous has continued to increase: so living level that will place an unacceptable Scheme before Pension Reform
300 years). Wine from all over the longer in retirement is becoming tax burden on the workers. starts. The BOSS membership is an
world was being auctioned, some a financial headache for pension Something has to give. ideal way of reaching a very large
as an investment. And pensions providers and the state. So what’s going to happen? The number of people. The BPIF’s pension
had become as popular as the vinyl The Government has increased BPIF and their pension advisers advisers are registered with the DWP
record: the active membership of the minimum retirement age for held a meeting with the Personal to receive State Pension Forecasts,
private sector pension funds reached pension schemes to 55, a change Accounts Delivery Authority (PADA) and we can distribute these to your
8.1 million in this decade. Life that will come into effect in 2012. and the Department for Work and people for you. The forecast will show
expectancy was now 71 years, but From 2044 the state pension Pensions (DWP) recently to find out. state retirement age, state pension,

“Living longer in retirement is becoming a financial

headache for pension providers and the state.”

with most people retiring at 65, that retirement age will go up to 68. What’s coming next is called Pension and state second pension (that’s the
still didn’t allow too many people to Have these changes been brought Reform. April 2012 is the planned one you have to decide whether to
enjoy their pensions for long. in to reduce the length of time we start date when all employers contract in or out of).
Fast forward to the new draw our pension? What about the will have to register a workplace So a great deal has happened in
millennium, however, and the people who don’t have a workplace pension scheme and auto-enrol all the last 339 years or so – and a great
picture had changed again. pension: should they be enrolled of their employees into that scheme. deal more is scheduled to come. We
Pension schemes were becoming into their employer’s pension Contributions from employers will can’t be exactly sure what the future
increasingly expensive to maintain scheme without their consent in be a minimum 3% and employees will hold. The chances are, though,
and the number of deferred order to increase their retirement 4% with a further 1% added as tax that even in 2044, people will still be
members was increasing. But after income? relief. Any employer pension scheme auctioning wine. And there will still
all, a pension was something you Many find that option in place at present will need to be of be coffee houses – although whether
put off until later in life, and given unattractive. But how did we get into equal stature to the default money we’ll be able to afford to drink in
that the average life expectancy was the situation of even considering purchase national pension scheme them is another matter. Sounds like
still going up, that seemed to make such a move, when in the 1970s being developed by PADA for another good reason to invest in a
sense. pensions were the greatest thing delivery after 2012. pension.
In 2001 the Government since the cheese fondue dinner Not all of the rules have been
introduced the Stakeholder pension party? decided yet. What about the coming n IF YOU WOULD LIKE MORE
in an attempt to get more people to The majority back then joined General Election – will this change INFORMATION ON THIS SERVICE,
save for their retirement. Although Occupational Final Salary Schemes, things? Not significantly; whichever PLEASE CONTACT MERIDIAN,
designating a scheme was made where the employer guaranteed party wins, auto-enrolment and OUR PENSION ADVISERS,
compulsory for all employers two thirds final salary after forty mandatory contributions are certain. ON 0800 132100.

November/December 2009 | BOSS TODAY 21

Boss 20-21 Edit.indd 3 17/11/09 12:03:52