Last week, the Bank of England stepped in with rescue measures to prevent a crisis in UK pension funds. For most people who expect to depend on a pension fund for their financial well-being – either now or in the future – news of the crisis came at the same time as news of the rescue, so we were reassured even before we knew that we needed to panic. But the rescue arrangements end on 14 October. Pension fund managers, and those who oversee them, have just 10 days to get things sorted if the problem isn’t to start up again.
I keep reading that the government is planning to increase National Insurance contributions “to fund social care reform”. I really don’t think that’s correct. I don’t doubt that the government is planning to increase NI contributions. And that it is also planning to improve social care. But I question the idea that the one can really be said to be paying for the other.
When the Thatcher government privatised British Telecom in the 1980s, they created a regulator to cap prices. They did the same with the privatisation of water, electricity and gas. No one suggested then that Thatcher’s policy was Marxist or State intervention. So is there any justification for such accusations now that Theresa May is proposing that the energy regulator should reintroduce a cap?Read more
Regular readers of this blog must be sick to death by now of me repeating how much damage accounting standards are doing to pension schemes (here, here, here and, even on video, here). So I’ll be brief this time – very, very brief. There is finally light at the end of the accounting tunnel.Read more
Tax avoidance has become a hot topic. The Times newspaper has recently unmasked a scheme in which income tax is avoided by the ludicrously simple means of saying the salary is only a loan which might have to be repaid (but never actually is). One of the newspaper’s columnists, David Aaronovitch, has been writing about the immorality of tax avoidance (both links behind a paywall).
I used to think it was easy to spot the moral dividing line when it came to tax avoidance. If our government had created the exemption, that meant they positively wanted us to take advantage of it. Anything else was almost certainly a loophole and morally objectionable, even if it was legal. But does that distinction still apply?Read more
Financial accounts are supposed to enable readers to understand the financial position of the entity under review. But, yesterday, the National Association of Pension Funds published a report attacking the notion that accounts provide neutral and reliable information about an employer’s pension scheme liabilities. The critique, written for the NAPF by Dr Iain Clacher and Professor Peter Moizer of Leeds University Business School, is pretty damning of the standard setters.Read more
I think the three words at the end of the following sentence must be the most chilling – and the most heart-warming – I have ever read from an accounting standard-setter:Read more
… to be giving a presentation whilst the audience is tweeting their comments onto a screen behind your head. Perhaps that’s going to be the way of the future.Read more
I had always thought that employee contributions into a pension scheme were a mistaken idea. Should I be re-thinking that in the light of Hutton’s report out today? Or should Lord Hutton?Read more
Lindsay Tomlinson is calling for a summit to change the way pension costs are calculated in company accounts. As chairman of the National Association of Pension Funds, Tomlinson would say that, wouldn’t he? Except that Lindsay Tomlinson is also a director of the Financial Reporting Council, the parent body for the UK’s accounting standard-setters.Read more