January 2018 will soon be a dim and distant memory but the problems of 2017 still linger on. Here is the week in news.
This week, MPs and regulators tried to set the world to rights. Here is what you need to know about what has been going on in the last seven days.
1) Solving defined benefit pension problems
How do you solve the problems with defined benefit pensions?
The work and pensions select committee wants the government to tighten the net around auditors and their role in company pensions collapses in its upcoming paper on defined benefit (DB) schemes.
Labour MP Frank Field told FTAdviser that the document, expected to be published in the spring, should have a look on “what is the duty of auditors of companies, should that also encompass the state of the pension fund, [and] what sort of warning notices should auditors be making on this front”.
This is a view shared by other members of the committee, such as Scottish National Party MP Chris Stephens.
The Department of Work & Pensions (DWP) has been working on its white paper on DB schemes, which was first expected to be published in 2017, then delayed to February 2018, and it is now expected before the summer.
2) Letter for McVey
Former GMTV presenter Esther McVey has hardly had time to sit down in her new role as secretary of state for work and pensions and she is being chased by Waspi women.
Labour MP Stephen Morgan hand delivered a letter to Ms McVey in an attempt to raise awareness of women who say they didn't received a letter notifying them about changes to the state pension age.
The Portsmouth South MP personally delivered the letter to Ms McVey at the Department for Work & Pensions (DWP) on behalf of the Women Against State Pension Inequality (Waspi) movement, which claimed while the 1995 Conservative government's Pensions Act included plans to increase the women's state pension age to 65 – the same as men's – the changes were implemented unfairly, with little or no personal notice.
The group also claimed the changes were implemented faster than promised with the 2011 Pension Act and left women with no time to make alternative plans, leading to devastating consequences.
3) Regulator recognises Kids issues
The Financial Conduct Authority (FCA) addressed serious concerns of senior industry professionals and trade bodies about the implications for investment trusts and their investors of having to put projections of future performance in key information documents.
Simon Fraser, chairman of the £4bn Foreign and Colonial Investment trust told FTAdviser it risked creating a "future mis-selling scandal".
After FTAdviser put these concerns to the regulator the watchdog stated: “We understand some firms are concerned that, for a minority of Priips, the ‘performance scenario’ information required in the Kid may appear too optimistic and so has the potential to mislead consumers.
"There may a number of reasons for this: the strong past performance of certain markets, the way the calculations in the Regulatory Technical Standards must be carried out, or calculation errors.
"Where a Priip manufacturer is concerned that performance scenarios in their Kid are too optimistic, such that they may mislead investors, we are comfortable with them providing explanatory materials to put the calculation in context and to set out their concerns for investors to consider.”
4) Pension scammers made to pay
Four people who ran a series of pension scams have been ordered to repay £13.7m after The Pensions Regulator (TPR) won a legal battle in the High Court.
Scammers David Austin, Susan Dalton, Alan Barratt and Julian Hanson will need to repay the sum over a two-year period.
This is the first time such order has been obtained, The Pension Regulator said.
The fraudsters obtained the money after 245 members of the public were persuaded, via cold-calling and similar techniques, to transfer their pension savings into one of 11 scam schemes operated by Friendly Pensions Limited (FPL).
5) Computer says No
Just one day after it came back online after a supposed upgrade, investment advisers were finding they and their clients are locked out of the Aviva for Advisers platform.
Advisers were told on 23 January the platform was back up and running.
However Clive Farrell, an adviser at Galleon Wealth in Ipswich, told FTAdviser his experience of the platform since it came back online has been “chaos”.
Catherine Comben, spokesperson for Aviva, said the company was aware that there are a number of glitches on the platform and was working to fix those.
emma.hughes@ft.com
