The Fund Doctor » Pension Funds

No Pension in Irish Construction Industry – 7 Most Common Reasons

admin — Sat, 01 Aug 2009 22:58:08 +0000

Pension’s Tips: It is said that people either “live too long or die too young”, and nowhere is this more typified than in the Construction Industry, where up to recently, both the safety record and thePension planning record had been nothing short of appalling.

On the one hand, the fatality and injury record of workers in the Irish Building Industry was one of the highest in Europe (in 2001, 28% of all workplace fatalities were Construction Industry related), while those who were lucky enough to have survived working on Irish Construction sites faced a very uncertain future as they neared retirement.

While the authorities have made some strides in addressing the Construction Industries safety record in the recent past, there is still considerable scope for improvement with regard to adequate and proactive Pension Planning (in an IAPF survey dated October ,2005,it was found that nearly the entire Irish population was dependant on the statepension)While a recent IMPACT Trade Union report found that in Ireland, there are currently 5 people of working age for every person aged over 65, but that figure will fall to 2 to 1 by 2050,causing a huge funding crisis.

The lack of Pension planning is a symptom of a larger Irish malaise, namely their totally reactive nature to nearly everything. This especially applies to Construction Industry Pensions, where despite extensive publicity on the need for adequatePension planning, the Pension expertise available and the negative effects of no Pensions being in place at retirement, excuses still abound for doing nothing. In an effort to be seen to do something, the Government is even rumored to being looking at making Pension funding compulsory.

In over 25 years of Pensions planning, here are the 7 most popular excuses I’ve come across in the Construction Industry for not planning a Pension.

* I can’t afford it
* I’m too young/old
* “Someone else” will provide for it
* I’ll do it “later”
* There’s a state pension
* I don’t want to think about it
* I’ll be dead by then

I can’t afford it — expansive pension ……ask yourself can you afford NOT to? Waiting until you can afford it will never happen. The minimum monthly premium for a self employed Pension is €25 gross, or with tax relief at 20%, €20per month ……that’s €1.00 per day. Given that the minimum Lottery ticket price is €1.50 per go, and there are absolutely no guarantees whatsoever with that, €1 is a small price to pay for securing your future and security of mind, isn’t it?

Insurance go first! I’m too young/old ….you’re never too young, or old for that matter, to start to proactively secure YOUR future. The earlier you start, the longer your funds have to grow and appreciate in value, while even starting much later in life will give you tax relief and help you to exercise SOME power over your finances.

A plan for my Pension? “Someone else” will provide it …………who, precisely? And why should they? While an employer may contribute to your Pension Plan, ask yourself how much of a benefit you’d expect to get, would it be guaranteed, and if so, for how long? Would you be happy to have “someone else” pick your clothes, choose your car or have any other say in your life – but if you don’t plan for your Pension, “someone else” WILL be deciding your future.

I’ll do it “Later …… look at the cost of delay – to provide a pension of €2,000 per month, a 20 year old would need to pay €270 per month into a pension plan, while a 40 year old saving for EXACTLY the same amount would need to pay €951 per month – FRIGHTENING, isn’t it??

There’s a State Pension …….there is alright. As of Jan, 2007, that stands at the princely sum of €209.30 per week. Now ask yourself, given the ever increasing cost of accommodation, transport, food, communications, entertainment etc., if you were relying on the State Pension ONLY, would you be LIVING or EXISTING?

I don’t want to think about it…….fair enough, that’s your prerogative, but burying your head in the sand on the Construction site won’t make planning for your future go away. Can you imagine a Builder deciding they didn’t want to think about something on a Construction site……would you be happy to work there?

I’ll be dead by then …perhaps you will, but suppose you’re not? Can you imagine HAVING to continue doing manual labor out of dire economic necessity? Or what if you’ve worked all your life and in spite of your best efforts, face 30 years of retirement?

Another alternative the Irish Government are looking at, as pointed out in a recent IBEC report in Feb 2006, is that they may increase the minimum retirement age to 70 or 75.Can you imagine the potential effect this would have on the Construction Industry? So, as an Irish Building worker, why don’t you take control of your future, ignore the 7 most popular excuses outlined above, and make your Pension THE KEYSTONE of your financial future……and if you need another incentive, try living on €209.30, and nothing else, for a few weeks!!!

For general pension’s information, please visit the website of the Irish Pensions Board or for Information relating specifically to Pensions visit Irish Construction Industry Pensions.
Ireland’s premier supplier of Pension and Retirement planning for those contractors, suppliers and sub-contractors who work in the Irish Construction Industry

Pensions Guide: State Pensions

admin — Wed, 07 Jan 2009 15:49:52 +0000

The most important financial decisions you’re likely to make in your life are those concerning your retirement. To have a secure future with a comfortable standard of living after you’ve stopped working, you’ll need to plan your finances carefully.

Pensions are becoming more and more important as people now live longer into their retirement. Lifestyles have also changed – people often take out mortgages later in life than they used to, meaning that they may still have a mortgage to repay when they stop working. And as people are experiencing better health and longer retirements, they want to have a reasonable disposable income in order to enjoy more leisure activities in their later years.

This is the first of two guides outlining the fundamentals of pensions. It’ll help you understand more about state pensions and how they are calculated. The second guide focuses on private pension schemes. These articles do not constitute financial advice and should only be used as an introductory informational guide to pensions. For advice on how to plan your finances for your future, seek professional advice from an independent financial advisor.

Definition

First, back to basics – what is a pension? It’s a regular source of tax-free income for you to live on when you retire. As contributions towards your pension fund during your working life also receive tax relief, it’s a more tax-efficient than other methods of saving.

The government department responsible for managing and administering state pensions and other pensions related benefits is The Pension Service, which is part of the Department of Work and Pensions.

State pension

The government provides a state pension, which can be claimed by men over the age of 65 and women over the age of 60 (although this will increase to 65 in line with the male pension age by 2020).

Not everyone qualifies for a state pension, and even those who do will receive different incomes depending on their working history. Entitlement is calculated according to the number of national insurance contributions (NICs) you (or your partner/spouse) have paid, which are converted into ‘qualifying years’. You’ll need to have worked and paid contributions for around 90% of your adult working life in order to receive the full state pension. If you’ve been out of work for long periods in order to bring up a family or look after someone, you’ll be compensated for missing NICs through ‘Home Responsibilities Protection’. If you’ve been out of work for other reasons and have been claiming benefits such as jobseeker’s allowance, or income support, the government will have paid your NICs on your behalf for the period(s) in which you claimed benefit. The minimum you need to get the basic state pension is 25% of the qualifying years. If you have anywhere between the minimum and maximum amount of qualifying years, the amount you receive in your state pension will be adjusted in relation to how many qualifying years you have, so the more you have, the better. Those who have less than 25% of qualifying years won’t be able to claim any state pension at all, although there are other government pension benefits to assist those on low incomes in retirement, such as pension credits or the Over 80 pension.

Additional state pension schemes

In addition to the basic state pension, the government has a top-up scheme to enable people to increase the amount of pension income they receive.

SERPS (State Earnings-Related Pension Scheme)

Until April 2002, SERPS was the government’s second pension scheme, which allowed anyone earning more than £75 per week to make additional NICs. The level of NICs paid was earnings-related. However, the government deemed SERPS unfair on people with low incomes and those with big gaps in their employment history, so it was crapped and replaced with the Second State Pension in 2002 with the aim of allowing everyone to save more for their retirement.

SERPS gave the option of ‘contracting out’, which could be done for one of two reasons: in order not to pay the additional NICs, or to put the additional NICs towards a private pension fund.

Second State Pension

People who were paying into SERPS will now be paying into the second state pension and may therefore receive their additional state pension from two different sources when they retire.

The Second State Pension is still linked to earnings. However, it’s calculated in a way that provides better support to those on low incomes, or people who don’t have constant work because of illness or disability. In these cases, the government tops up their credits to a flat rate of £12,100, so they will receive NICs as if they had earned an annual salary up to this amount.

As with SERPS, it’s possible to ‘contract out’ of the Second State Pension, either to stop paying the additional NICs or to put them towards your own pension fund.

Finding out how much your state benefits are worth

To help you plan your savings towards your retirement, the government offers state pension forecasts to let you see how much you’ll be likely to receive as retirement income. Visit the Government Pensions Service website for more information (www.thepensionservice.gov.uk).

New survey triggers concerns for pension safety-net

admin — Sat, 03 Jan 2009 19:27:37 +0000

It has been revealed that up to 91% of final salary schemes cannot afford to pay out benefits, with the under-funded schemes carrying deficits of over £228 billion.

The PPF takes around £700 million from companies every year, but this has proved too little and doesn’t cover its liabilities. The PPF has a deficit of around £550 million.

The PPF has already carried the weight of 62 schemes that failed, which include Woolworths, and Lehman Brothers.

There are now growing concerns that further failed schemes will result in the PPF to collapse, leaving future companies at risk of bankruptcy vulnerable to loss of employee pensions.

The government has been called on by The National Association of Pension Funds to back the scheme and act as a safety net, but the government has yet to comment.

NAPF Chief Executive, Joanne Segars, said: “In these exceptional times, maintaining confidence and security in pensions is vital so it would be a sensible measure for the Government to be the ultimate guarantor of the Pension Protection Fund.”

Vince Cable, Treasury spokesman for the Party, said: “I get a very strong sense that this is the Titanic hitting the iceberg. It is potentially very vulnerable in a serious recession, which is what we are now getting into. Companies won’t be able to sustain the fund in its present form. The Government has to be explicit that it is standing behind it.”

The potential issues were raised after a new survey from Punter Southall revealed that 60% of pension schemes are unaware of how the recession is affecting their funding position.

Social Security Administrative Costs: a Receipe for Collapse of Sierra Leone’s Pension Program

admin — Thu, 11 Dec 2008 12:49:06 +0000

OVERVIEW:

As the nation awaits the second actuarial evaluation of the National Social Security & Insurance Trust (NASSIT), a thorough analysis and understanding of the initial actuarial valuation report conducted by Canadian based actuarial firm Regie Des Rentes Du Quebec (RRQ) for the period ending December 31, 2004, is instructive in assessing the performance and future viability of the nation’s pension scheme.

Pursuant to Article 47 of the National Social Security & Insurance Trust Act, 2001 an actuarial evaluation of the pension scheme is by law required every 3 years during the first ten years of the pension scheme and once every five years thereafter. The scheme was initially implemented in 2002 with the first actuarial valuation performed in 2004. The second statutory valuation should therefore be conducted by 2007/2008 and an actuarial report issued soon thereafter.

The 2004 RRQ actuarial studies report while acknowledging the general good financial condition of the scheme, as expected of start-up schemes without pension payment liabilities, however highlighted areas of concern and deficiencies that both Sierra Leonean policymakers and pension participants must be made aware of and requisite steps taken to address in order to forestall the Trust’s failure and potential bankruptcy.

Aside from the need for growth in the insured population and the need for more scheme experience data, the actuarial report paid especial focus on the exorbitant administrative expenses and costs and the management of investments, as areas of concern requiring corrective measures.

ADMINISTRATIVE COSTS

An analysis of the pension scheme’s administrative costs, according to the actuarial report, reveals that NASSIT’s “administrative expenses compared to insurable earnings were higher than the level expected in the inception report ”.

It is worth noting that at inception of the scheme an industry best practice expenditure for administrative costs was pegged at 1% of insured earnings as recommended by the International Labor Organization (ILO).

However, since 2002 when administrative costs were at 1,691 billion Leones, the administrative costs have progressively increased to 3,250 billion Leones in 2003 and to a whopping 6,407 billion Leones in 2004. As noted in the RRQ actuarial report, the 2004 costs exceeded the ILO recommended 1% for the scheme’s administrative costs by a proportion of 230%.

In the recently published annual report for 2006, NASSIT reported general administrative expenses at 15.3 billion Leones while the Trust’s payments in pensions amounted to a paltry 1.9 billion Leones. The 15.3 billion Leones in administrative costs represented an increase from 14.4 billion Leones in the previous 2005 fiscal year. Thus as of the year 2005, administrative costs represented 5 percent of the insurable earnings of the scheme. Such a ratio glaringly is economically untenable as even when compared with other African countries 1.5% for administrative costs, the trajectory of NASSIT’s administrative costs remains one of the highest in the world.

The amoebic growth in the Trust’s administrative costs has continued to balloon as figures for the year ended 2007, revealed that the stratospheric sum of 22.1 billion Leones was expended as administrative costs and expenses.

While acknowledging that nascent pension schemes generally have higher administrative costs at beginning than matured schemes, and factoring that the “initial seed money of 4.5 billion Leones provided by the government for setting up of the Scheme was fully refunded by the end of the third year”, the continued growth in administrative costs with no apparent oversight or checks and balances by the Trustees / Board of Directors reflects a lack of good governance controls and potential inefficiencies that must be addressed and corrected.

For should this trend continue, the Trust will be rendered bankrupt and the country, the statutory guarantor of the pensions will be saddled with unfunded pensions by the time the equilibrium period ends and pension liabilities are at their peek. As fiduciaries, the board members must be seen as exercising their fiduciary duties on behalf of the pension scheme’s participants- the workers of Sierra Leone.

STAFF COSTS

Staff costs represent a large percentage of the administrative costs and were estimated to consume more than 55% of total expenditures of the pension scheme. For example, payroll costs increased from 5.1 billion Leones to 8.2 billion Leones from 2005 to 2006. As at the period ending December 2006, the scheme employed 227 employees representing a net employee increase of 6 from the prior year. In 2005 the scheme reported a total of 221 employees on its payroll. The 6 new employees the scheme employed in 2006 in addition to whatever cost of living increases in salary paid the existing employees could most certainly not explain the exorbitant increase in the wage bill of the scheme.

As of the second quarter of 2008, the Trust reportedly has a total of 275 employees, an increase in its employee rolls from 227 in 2006.

Moreover, in addition to staff costs, the remuneration of key management personnel salaries and allowances substantially increased from 1.6 billion to 2.2 billion Leones from 2005 to 2006.

According to the NASSIT staff matrix, the scheme has 8 executives and 13 senior management positions. If “key management” refers to only these positions, it thus represents 21 personnel who over a one year period received as salaries and remuneration an additional humongous sum of 2.2 billion Leones from the Sierra Leone workers pension fund.

GENERAL COST

Aside from staff costs as reviewed above, the amorphous category of “General Costs” represents about 30 percent of the scheme’s expenditures. Whilst initially at 543 million Leones in 2002, general costs expenditure had ballooned to 963 million Leones in 2003 and to an exorbitant 2.1 billion Leones in 2004.

It should be noted that while administrative costs by the year 2004 represented 95.4 percent of total benefit expenditures and 24.0 percent of contribution income of the entire pension scheme, the continued fiscal viability of the pension scheme is greatly at stake as an inordinate amount of contributions of workers hard earned wages seem to be spent on the scheme’s management and staff expenses.

ANALYSIS OF INVESTMENT PORTFOLIO

Since a major source of financing for the Trust is investment income, which derived from the right investment mix and returns determines and ensures the scheme participants level of pension benefits, this article will not be complete without an analysis of the NASSIT’s current investment strategy.

The scheme’s investment strategy policy has been adjudged in the actuarial report as economically and actuarially well designed. The devil however is in the implementation of this well designed policy. Especially as relates to stocks in companies, the absence of an adequate financial infrastructure where shares and stocks can easily be traded to free up cash flow exposes the Trust to additional investment risks.

Despite this shortcoming in the country‘s financial environment, the Scheme has poured over 39 billion Leones into equity investments, even though the country does not have a functional stock exchange.

A review and analysis of the types of businesses and ventures the Scheme’s equity investment has been directed into causes risk concerns for achievement of the expressed strategic objectives of the investments portfolio and for the continued viability of the scheme.

The Scheme in 2006 increased its equity asset mix from 11.4% in 2005 to 20% in 2006. This category represented, aside from Treasury Bills, the largest percentage investment by the Scheme.

LONG TERM INVESTMENTS

As of 2006, the Scheme’s long term investment portfolio totaled 39.6 billion Leones, comprised of equity investments in the following:

1) Debentures in SierraBlocks of 8.2 billion Leons.

2) Equity investment in SierraBlocks of 7.1 billion Leones.

3) Equity investment in Barock Investment of 7,268,000

4) Equity in Regimanual Gray SL Limited of 6,000,000.

5) Equity in Gouji Property Investment of 9,129,992.

6) Equity investment in Eco Bank of 3,033,917 Leones.

7) Equity investment in Kimbima Hotel of 5,296,414.

Equity investment in Sierra Leone Brewery of 7,005.

The scheme’s investment liability exposure in the cement block making company, SierraBlocks represents a 60% ownership shares with a concomitant 60% of liability. Such exposure of the scheme’s capital and considering the high costs of the homes Regimanuel Gray is selling in Goodrich must serve as a warning signal that returns from this venture are likely to fail to conform to minimization of costs and risks associated with investments-a core objective of the scheme‘s investment policy.

The scheme’s experience with the Gouji Property Investment when it prematurely recalled its equity investment and reportedly only received a portion of the Trust’s initial capital investment is highly instructive.

Currently, contribution accumulation represents the main source of asset increase in the scheme’s portfolio. Since the scheme is young and growing this trend will continue. However, the laws of diminishing returns will very soon set in and contributions not only will remain stagnant but will inevitably regress resulting in an adverse impact on the scheme’s investment mix.

CONTRIBUTION DELIQUENCIES

As a mandatory pension scheme all employers and employees are required to contribute into the Trust. However, an alarming trend witnessed over the past five years of the Trust’s existence shows that government departments and parastatals are the greatest delinquents with mounting arrears of contributions owed to the Trust on behalf of their workers. For example, as recorded in the Trust’s 2006 annual report, total contribution delinquency increased from 9.1 billion Leones in 2004 to 12.9 billion Leones in 2006. This amount subsequently increased to 16.2 billion Leones in 2007 and as of the second quarter of 2008, the contribution arrears stood at 19.4 billion Leones.

The main reason adduced for this delinquency is the non-compliance by government ministries, departments and parastatals whose contribution arrears rose from 2.1 billion Leones in 2004 to 5.5 billion Leones in 2006. The trend of non-compliance by parastatals especially continues unabated as recent statistics for the second quarter shows that their non-compliance is currently at 10 billion Leones.

With all the statutory instruments at its disposal, the Trust must be aggressive in ensuring outstanding contributions are immediately recouped. A reduction and elimination of the arrears must be a benchmark in assessing management’s productivity and efficiency. The Sierra Leone landscape is dotted with government services institutions and companies that have failed by their inability to ensure user-service payments are timely collected for services, be it insurance, electricity, water supply and other public services. At this rate and trending, NASSIT is setting itself up for the same demise.

PROPOSAL FOR EXPANSION OF THE INSURED POPULATION

The participation of Sierra Leone’s diasporas in the country’s pension scheme, the NASSIT, represents one such creative and out of the box thinking that management and the government must urgently explore.

Diaspora participation in NASSIT could be achieved by a system of purchase of credits in foreign currencies, into the pension scheme, modeled on the concept of “Diaspora Bonds”; where countries raise financing from their overseas diasporas through a debt instrument .

However, unlike a debt instrument, the sale of credits into the NASSIT pension scheme allows diasporas to participate in the nation’s social security system with benefits inuring to both the diaspora participant and the NASSIT. In the case of the diasporas it ensures:

Patriotism, as participation affords continued connection to the home country.

Satisfaction of contributing to and participating in the home country’s national economic growth.

Protection as a risk management tool, as the survivor’s benefit component of the pension scheme will afford benefits to beneficiaries in the home country, in the event of the death or disability of the diaspora participant.

In the case of the country and NASSIT, it provides:

Extension of the covered population, providing additional private sector capacity, which the scheme desperately needs to meet actuarial projections.

Access to foreign capital remittances, as contributions would be made in foreign currencies.

Risk diversification, as the foreign capital infused into the scheme could be invested in foreign investments and international bonds, stocks and indexes.

Needed capital for developmental programs such as the current NASSIT low cost housing project.

CONCLUSION:

The establishment of the pension scheme in Sierra Leone represents a singular achievement in public policy implementation over the past 30 years and if properly executed and managed long-term will serve generations of workers and contribute positively to economic and social development of the country. It is thus in accord with the tremendous expectations for success of the scheme that the above critique and suggestions for curtailing the run away administrative costs of the Trust are been proffered not only to management but especially the Board of Directors.

What is a Pension Annuity?

admin — Mon, 08 Dec 2008 06:00:18 +0000

When the investment in your personal pension plan reaches maturity when you retire, you will need to transfer its accumulated value into a regular income for the remainder of your retirement. This is achieved through the purchase of a pension annuity – a seemingly simple and straight forward transaction that exchanges the final value of the pension fund into which you have been paying into a regular income.

Whilst the principle of a pension annuity is seemingly very straight forward, however, things are rarely quite as simple as they seem.

The first and probably most critical aspect of buying a pension annuity is that it is a long-term, one-off commitment. You have just one shot at it, since there is no going back and asking for a refund of all of the capital simply because, after the event, you have found a better deal elsewhere. In other words, it is very important that you make the right choice.

Making the right choice is made no easier by the fact that a host of different annuities all offer a host of different annuity rates – i.e. will offer a different level of income for the same amount of pension investment.

The difficulty is further compounded by the sheer number of different types of annuity available these days.

Standard annuity – the most conventional form of annuity is one that pays you a fixed income throughout the remainder of your life. The income is known in advance, so you have the security and peace of mind in knowing just how much that will be;

With profits annuity – as the name suggests, this relates the income you receive to an element of your initially invested sum that is in turn invested again in equities, bonds and gilts. In this way, your annuity reflects some of the risks inherent in such investments;

Unit-linked annuity – this is probably the choice for those prepared to take the greatest risk on an annuity that is entirely subject to the fluctuations of the investments made;

Immediate (“temporary” or “purchased life”) annuity – this form of annuity needs to be purchased either from the cash element of your matured pension fund or some other cash resource. The advantage of this kind of annuity is that part of the annuity is treated as a return of your initial capital and, therefore, is not taxed, whereas the whole of your pension annuity would be subject to income tax;

Impaired life annuity – this is a type of annuity designed for those whose actuarial life expectancy is lower than someone of the same age in the general population. Different annuities will operate different definitions of what amounts to “impairment” of life, but it is generally a question of an existing serious illness or lifestyle factors such as smoking, obesity or past occupation.

Summary

The seemingly simple and straight forward question of converting the final value of a pension fund into a regular, income-paying annuity actually requires the kind of advice you can best receive from an independent financial adviser, since:

Your pension annuity decision is of a one-off type that you need to get right the first time;

There is considerable variation in the level of income paid by any one annuity – naturally, you would want the highest paying;

There is a wide range of different types of annuity – some higher, some lower, risk – an independent financial adviser will be able to help you choose the one you want.

Are You on Course for a Comfortable Retirement or Pension Purgatory?

admin — Sat, 29 Nov 2008 16:26:56 +0000

It is generally accepted that we have a retirement planning crisis in the UK. The recent stock market volatility is causing more pension problems, with £19bn wiped off the value of the top 200 defined benefit pension schemes in the first half of March alone. Around 25 million of us have defined contribution pension plans – either with their employer or as a private pension plan. The value of these plans are often closely linked to stock market performance.

Here are five questions to help you work out if your finances are in good shape or battered by the credit crunch.

Do you have a pension?

If your answer is yes, move on to Question 2. If no, the seriousness of your position depends on your age and whether you have any other savings that you could use in retirement. Readers under the age of 40 still have plenty of time to build up a reasonable pension fund. But if you are older, you need to start setting substantial amounts aside now.

What type of pension plan do you have?

Employees who have the option of joining a company pension scheme to which the employer makes contributions should grasp the opportunity with both hands. For those who don’t, a cheap stakeholder plan from Friends Provident or Clerical Medical is a good starter plan. If you want to make big contributions and have tight control over the investment of your money, you could consider a self-invested personal pension (Sipp) such as the one sold by Standard Life.

When did you last check the performance of your pension?

You need to keep an eye on where your money is invested and how it is performing to make up any shortfalls as and when they develop.

What are its charges?

Since April 2001, charges on some personal pension plans have been lowered but other plans still suffer from high charges that will eat away at the value of retirement benefits.

How much do you contribute?

Most people like to think they will retire on an income equivalent to two-thirds of their final salary, but few end up with that. Check how much you need to save according to your age, salary and expected retirement age at pensioncalculator.org.uk.

Top Tips For Pension Transfers!

admin — Wed, 26 Nov 2008 03:11:41 +0000

If you’re considering a pension transfer, then these tips could help you in the transfer process.

1.Find an Independent Pensions Transfer Advisor

Pensions law and regulation is so complex and changes so rapidly, that you really do need good advice when it comes to transferring your pension. An independent advisor isn’t tied to any particular product, and has access to all the information you need to make an informed decision. In addition, they will be aware of the latest changes to the pensions regulations, ensuring that your transfer falls within the rules. They can check the current value of your existing pension and compare it to the performance of other similar schemes on the market. Don’t transfer your pension without consulting an expert.

2.Check Benefit Levels

Each pension scheme has a different level of benefits. Whilst some are very generous, others are not, and you want to be sure that you are transferring to a pension that has equally good, if not better, benefits than your current scheme. Your pensions advisor can help you to check benefits levels and talk you through which are the most important to hold onto.

3.Growth Levels

If you are transferring a pension, there may be a period where the new scheme needs to grow to the size of your original pension fund. For this reason, you should ask your pensions advisor to check growth levels to see which funds are likely to return your investment to its current level the quickest.

4.Nominations

Make sure that you can nominate one or more beneficiaries for your pension scheme and that the pension fund manager will honour your nomination. If you die before retirement, your pension entitlement will be paid to your nominated beneficiary or to your estate. To make sure that your pension goes to the people you want it to, your nominations need to be accurate and, if necessary, you should reinforce them in your will.

5.Retirement Age

If you are transferring your pension less then 10 years before retirement, make sure that your new scheme gives you the same rights as your old one. If you are intending to retire early, ask your pension advisor to check the value of your existing scheme and the scheme you want to transfer to. This will help you to ensure that you have a good income on your retirement.

6.Management Fees

The pensions industry is competitive and one of the key areas where pensions schemes compete is the management fee. This fee is usually applied annually and is calculated as a percentage of your funds. Many people choose to transfer their pension in order to obtain a lower management fee, so you should make sure that the scheme you choose has a management fee you are happy with.

7.Review

If you are considering transferring your pension, ask a pensions advisor for a review of your current situation. Once you have transferred your pension, it may be worth asking for a regular review, particularly as you approach retirement age, so that you can be sure that your pension is working for you.

8.Administration

You will need to ensure that you have all the paperwork relating to your existing pension scheme before you transfer. This paperwork is important when it comes to any contact you have with the company operating your pension scheme, and your pension advisor will need it in order to effect the transfer. Similarly, when you get the paperwork for your new pension scheme, keep it in a safe place so that you can access it easily when you are coming up to retirement.

9.Target Income

If you are transferring your pension scheme when you are still a long way from retirement, you may want to look at the level of contributions you are making. Talk to your pensions advisor about your desired target income, which will help them to work out the payments you need to be making into your new pension scheme.

Hedge Fund Roundtable Organized by Opalesque

admin — Tue, 25 Nov 2008 05:11:38 +0000

Detailed Description-

Tokyo June 2nd, 2008 — Opalesque, the world’s largest subscription-based publisher covering the alternative investment industry, has launched the fifth issue of its acclaimed regional Roundtable scripts, the “Opalesque Japan Roundtable”.

The Opalesque Japan Roundtable will be closing the 2008 coverage of the Asian hedge fund centers after having covered New Zealand, Australia, Singapore and Hong Kong (see here for Roundtable Archive:

http://www.opalesque.com/index.php?act=archiveRT

The Opalesque Japan Roundtable was sponsored by Nikko Citi Prime Finance and took place in their Tokyo office. Opalesque thanks Ed Rogers from Rogers Investment Advisors for helping to put the group together.

After a stellar performance in 2005, Japanese hedge funds were struggling in 2006 and 2007. Is 2008 the turn-around year? The good news is that endowments, sovereign wealth funds and large global hedge funds are coming back to Japan. What opportunities do they see? In this Roundtable script, you will learn:

* Background on Japan hedge fund performance and the state of the economy

* Will macro (economy) or micro (corporate governance on company level) catalysts drive the markets going forward?

* Why activist investors and activist hedge funds have been very

beneficial for Japan

* Will the Japanese version of the Basel II rules still prevent regional banks to rebuild their hedge fund allocations?

* How do Japanese pension funds and insurance companies view and use hedge funds?

The participants of the Opalesque Japan Roundtable are:

1. Angus McKinnon, Senior Partner, Tozai Investment Advisory

2. Nobuki Yasuda, Director of Alternative Investment, Pension Fund

Association

3. Goro Ohwada, CEO, Aino Investment Corporation

4. Kenichiro Nishi, CEO & CIO, Gaia Capital Management

5. Scott Callon, Partner/CEO, Ichigo Asset Management

6. Rory Kennedy, COO, United Managers Japan (UMJ)

7. Andrew Hill, Director, NikkoCiti

8. Koichi Shijima, Director, NikkoCiti

9. Atsko Nakajima, Director of Hedge Fund Investments, Ueda Yagi Securities Co.

10. Hideki Hashiguchi, Lead Representative, HSBC Global Fund Services

11. Toshihiko Nishida, Portfolio Manager, GCI

12. Isao Tomoyuki, Chief Investment Officer, Stats Investment Management

13. Rick Okuno, Rheos Capital Works

The Opalesque Hong Kong Roundtable Script can be downloaded here:

http://www.opalesque.com/index.php?act=static∧=RoundtableJAPAN

All other previously published Opalesque Roundtable Scripts (New Zealand (March 17th), Australia (March 25th), Singapore Roundtable (April 24th), Hong Kong (May 1st)) can be downloaded

Matthias Knab, Director of Opalesque Ltd, moderates the Opalesque Roundtables. Matthias Knab is an internationally recognized expert on hedge funds and alternatives and has frequently served as chairman of hedge fund conferences in New York, Tokyo, Shanghai, Hong Kong, Miami, Bahamas, Stockholm, Dubai etc. In addition, he has presented or moderated

at hedge fund events in Sydney, Cape Town, Madrid, and Bombay, and lectured at numerous universities on the subjects of hedge funds and the state of the global alternative asset management industry.

About Opalesque:

Opalesque leads the finance media space for its in-depth and innovative products. Since February 2003, Opalesque is publishing Alternative Market Briefing, the premium news service on hedge funds and alternatives. The launch of these Briefings was a revolution in the hedge fund media space (“Opalesque changed the world by bringing transparency where there was

opacity and by delivering an accurate professional reporting service.” -

Nigel Blanchard, Culross) combining proprietary news with the “clipping service” approach of integrating third party news. Each week, Opalesque publications are read by more than 360,000 industry professionals in over 100 countries.

Opalesque is the only daily hedge fund publisher which is actually read by the elite managers themselves

(http://www.opalesque.com/op_testimonials.html).

For more information,

About Opalesque publications:

Alternative Market Briefing:

A daily newsletter on the global hedge fund industry, highly praised for its completeness and timely delivery of the most important daily news for professionals dealing with hedge funds. Alternative Market Briefing offers both a quick overview and in-depth coverage. Subscribers can also access the industry’s largest news archive ( 26,000+ articles ) on hedge funds

and related topics.

A SQUARE:

Opalesque A SQUARE = Alternative Alternatives is the first web

publication, globally, that is dedicated exclusively to alternative

investments. A SQUARE’s weekly selection feature unique investment oportunities that bear virtually no correlation to the main stream hedgefund strategies and/or distinguish themselves by virtue of their ‘lternative” motive – social, behavioural, natural resources, sustainable/environment related investing.

With its “research that reveals” approach, fast facts and investment oriented analysis, A SQUARE offers diversification and complementary ideas for: private, high net-worth and institutional investors, pension funds and endowments, portfolio and hedge funds managers.

Technical Research Briefing:

Delivers three times a week a global perspective/overview on all major markets, including Equity Indices, Fixed Income, Currencies, and commodities. Opalesque Technical Research is unique compared to most available research which is fundamental in nature, and not technically (chart) oriented.

Opalesque Roundtable Series:

In an Opalesque Roundtable, we unite some of the leading hedge fund managers (single and multi strategy managers) as well as representatives

of the local investor base (institutions, fund of funds, advisers) to gain unique insights into the specific idiosyncrasies and developments, the issues and advantages of individual global hedge fund centers.

No matter if you are a hedge fund investor looking for new talent, a hedge fund interested in diversifying your investor base or a service provider looking for new clients, you will get to know some of the leading heads of each hedge fund center and find invaluable information and intelligence right on your desk, without any travel involved.

For more information, please go to: Hedge Fund News |

Long Term Value Investing with Mutual Funds

admin — Mon, 24 Nov 2008 02:26:30 +0000

Years ago trading was usually an activity carried out by wealthy individuals from families that had likely been wealthy for generations. It wasn’t uncommon for the corporations of old to be owned and controlled by the members of a single family. However, over time the markets began to accommodate institutions comprised of groups of investors. This type of trading also evolved to involve different types of investment possibilities that served the interests of a variety of companies and people particularly for long-term savings goals.

Pension Funds

A pension is any payment made to a retired person based on years of service. Most pension payments are made in the form of annuity payments that pay a set amount each year. A pension fund usually involves regular contributions by the employer to an investment account. The risks of investment are taken by the plan sponsor (the employer). The investment account requires constant management to ensure the success of the fund.

Insurance

It used to be that insurance companies were only associated with planning for the future as far as life insurance or health insurance to protect against emergencies. Life and health insurance are an absolute necessity when trying to ensure financial security. Disaster can strike at any time making it not only an emotionally difficult time for family, but also financially if not prepared. Insurance companies over the years due to increasing medical costs have begun delving into other areas of financial planning. Namely the offering of financial products like Mutual funds (to be discussed in a moment) and annuities that make saving for the future easier and more accessible no matter what the financial position or need is.

Mutual Funds

A mutual fund is perhaps one of the most popular means of long term investing and is the vehicle of choice in IRAs and 401k accounts. A mutual fund is basically a way of investing in a pool of different companies in order to minimize risk. A mutual fund investment can involve investing in stocks, bonds and other securities. The appeal of a mutual fund is the fact that a fund manager makes the decisions regarding what investments should be made. Usually with mutual funds, an investor can choose the level of risk they are willing to assume. Since the goal is long term investing, a degree of risk is acceptable since overtime the collective value of the stocks in a fund will grow.

Mutual funds utilize a number of different strategies in order to increase their value. The primary advantage of a mutual fund is that of diversification and professional management. Professional portfolio management isn’t something that a majority of investors have access to so it serves as not only a safer investment but also usually a more profitable one. It should of course not be assumed that a mutual fund is a completely safe investment since it still hinges on the stock market that is prone to fluctuations, but since the goal is long term investing those fluctuations should not have a great impact on the overall future of the fund.

Pension Plans-Company-Sponsored Pensions Plans Cut & Offering 401k Retirement Plans

admin — Sat, 22 Nov 2008 07:38:58 +0000

Retirement Blues: Current Financial Crisis Forces Billions to be Pulled From Pension Plans

For everyone who has a pension plan, last year was one of the worst financial years. The crisis sucked more that $5 trillion from retirement plans that are company-oriented. This affected markets in the United States, as well as in Japan, the UK and The Netherlands. Due to the plunging stock market, there was a decline of 19% among worldwide assets. The only country that saw an increase in value was Germany.

United States pension plans were hit hard. These plans account for more than 60% of all global pension assets. The crisis resulted in company pension funds being under-funded by over $400 billion at the end of the year in 2008. Retirement accounts in the U.S. were declined by $2 trillion.

These massive losses have forced individuals planning to retire to adjust their retirement savings plans as well as their IRA & retirement plan investing. In many cases, people have completely stopped all traditional IRA and 401(k) plan contributions – some have completely went overboard by terminating their 401k plan all together. This will result in people having to work longer than they expected and may even force many to adjust their current lifestyles. These losses have severely affected the lives of people who had been relying on their retirement plan as a source of income. For example, the largest pension fund on Colorado lost $11 billion, more than 25% of its assets. The state pension fund in North Carolina lost 17% in value. Despite these huge losses, there are some companies who have found a way to increase the salary of CEO’s, even though those same companies have slashed their pensions to other employees.

Losses of Pensions Will Have Enormous Effects

For anyone who has a retirement plan, these losses will be very painful. It will have an effect on almost every household in the U.S., especially for those who have also watched the value of their home depreciate or who have lost their jobs. The crisis does not only affect individuals, it will also play a part in corporate earnings.

Company-sponsored pension plans are becoming rare. More and more companies would rather place the liability and cost of retirement savings onto the employees. At one point, pension plans were a key part of the benefit package offered by a company. Now, they are becoming scarce. Instead, companies are offering 401k retirement plans. These plans still allow the employee to save for retirement, but the employee has to make contributions out of their pay check. For some, 401k plans were not the right choice. Many employees turned to a traditional IRA or a Roth IRA to help with retirement savings.

At the end of 2007, company pension plans were over-funded. By the end of 2008, after the financial crisis, these same plans were severely under-funded. This swing of over $400 billion resulted in only 75% of U.S. pension plans being funded.

When the stock market crashed, companies were faced with choices. They had to decide how to cut costs by taking the cash out of the business itself, or by decreasing the amount being placed into pension plans. The results of these decisions are having a huge impact on employees around the country who were trying to save for their retirement.