Thursday, 23 March 2017

State pension age could be raised to 70, says report - Brian Milligan

Two separate reports for the government have raised the possibility that millions of people may have to work longer to qualify for a state pension.
An analysis for the Department for Work and Pensions (DWP) has suggested that workers under the age of 30 may not get a pension until the age of 70.
A second report, by John Cridland, proposes that those under the age of 45 may have to work a year longer, to 68.
The government is due to make a decision on both reports by May.
Ministers are under pressure to address the expected rise in the cost of pensions, which stems from longer life expectancy and the increasing ratio of pensioners to workers.
But at least six million people face the prospect of having to work longer.
"This report is going to be particularly unwelcome for anyone in their early 40s, as they're now likely to see their state pension age pushed back another year," said Tom McPhail, head of retirement at Hargreaves Lansdown.
"For those in their 30s and younger, it reinforces the expectation of a state pension from age 70, which means an extra two years of work."
Image copyright Getty Images

Proposed changes

In an extreme scenario, experts from the Government Actuary's Department (GAD) said the state pension age could be raised as high as 70 as soon as 2054.
Under existing rules everyone is due to get a pension by the age of 68.
Such a scenario would affect anyone born after April 1986 - in other words anyone under the age of 31.
The "extreme" scenario involves an assumption that people spend 32% of their adult life in retirement. The conventional assumption until now has been that people will spend 33.3% of their lives in retirement.
In the worst-case situation, the GAD calculations also suggest that the change in the retirement age from 67 to 68 could be pulled forward by as much as 16 years.
So while that increase is not due to happen until 2044, it could be brought in as soon as 2028, affecting those now in their late 50s.

'Extra year'

Former pensions minister Steve Webb was highly critical of the GAD's scenario.
"This is not what parliament voted for and is clearly driven by the Treasury. It is one thing asking people to work longer to make pensions affordable, but it is another to hike up pension ages because the Treasury sees it as an easy way to raise money," he said.
However, the other report, by the former CBI chief John Cridland, foresees more modest changes.
He recommends bringing the change from 67 to 68 forward by seven years, from 2046 to 2039. That would mean anyone currently under the age of 45 having to work an extra year.
The changes are due to be phased in gradually, over a two-year period in each case.
In addition Mr Cridland said there should be no up-rating from 68 to 69 before 2047 at the earliest, and that the pension age should never rise by more than one year in each ten-year period.
He also suggests that the so-called triple-lock be ended in the next parliament.
Up to now the triple lock has guaranteed that the state pension rises each year by inflation, earnings or 2.5%, whichever is the highest.
However, by linking the rise in pension payouts to earnings alone, the bill for pensions would fall from 6.7% of GDP to 5.9% of GDP by 2066.

Mr Cridland also recommends:
  • A new system of carer's leave, allowing older people with caring responsibilities to have time off work
  • A mid-life "MOT" to help people take decisions about work, health and retirement
  • Some vulnerable people in their 60s should have access to a means-tested benefit, along the lines of pension credit
  • There should be no "early access" to the state pension, despite this being raised as a possibility in the interim report
  • People could defer drawing their pension, taking higher benefits later

Tuesday, 21 March 2017

Billionaire philanthropist David Rockefeller dies at age 101

  Image result for images of  david rockefeller

David Rockefeller
David Rockefeller was the last of his generation in a famous American family that taught its children that wealth brings great responsibility. Even as children, he and his siblings had to set aside portions of their allowances for charitable giving.
That lesson lasted throughout his life; to mark his 100th birthday in 2015, Rockefeller gave 1,000 acres of land next to a national park to the state of Maine.
Rockefeller died Monday in his sleep at his home in Pocantico Hills at age 101, according to his spokesman, Fraser P. Seitel.
He was the grandson of Standard Oil co-founder John D. Rockefeller and the youngest of five sons and one daughter born to John D. Rockefeller Jr. He was also the guardian of his family’s fortune and head of a sprawling network of family interests, both business and philanthropic, that ranged from environmental conservation to the arts.
Unlike his brothers Nelson, the governor of New York who hungered for the White House and was briefly vice president, and Winthrop, a governor of Arkansas, David Rockefeller wielded power and influence without ever seeking public office. Among his many accomplishments were spurring the project that led to the World Trade Center.
“No individual has contributed more to the commercial and civic life of New York City over a longer period of time than David Rockefeller,” said Michael Bloomberg, a former mayor and fellow billionaire. “I have long admired his commitment to the city, which began with a dollar-a-year job working as a secretary to Mayor Fiorello La Guardia. During my time in City Hall, he was always there for the city when we called.”
Unlike his other brothers, John D. 3rd and Laurance, who shied from the spotlight and were known for philanthropy, David Rockefeller embraced business and traveled and spoke widely as a champion of enlightened capitalism.
“American capitalism has brought more benefits to more people than any other system in any part of the world at any time in history,” he said. “The problem is to see that the system is run as efficiently and as honestly as it can be.”
Rockefeller graduated from Harvard in 1936 and received a doctorate in economics from the University of Chicago in 1940. He served in the Army during World War II, then began climbing the ranks of management at Chase Bank. That bank merged with the Manhattan company in 1955.
He was named Chase Manhattan’s president in 1961 and chairman and CEO eight years later. He retired in 1981 at age 65 after a 35-year career.

In his role of business statesman, Rockefeller preached capitalism at home and favored assisting economies abroad on grounds that bringing prosperity to the Third World would create customers for American products.
He parted company with some of his fellow capitalists on income taxes, calling it unseemly to earn a million and then find ways to avoid paying the taxes. He didn’t say how much he paid in taxes, and he never spoke publicly about his personal worth. In 2015, Forbes magazine estimated his fortune at $3 billion.
As one of the Rockefeller grandchildren, David belonged to the last generation in which the inherited family billions were concentrated in a few hands. The next generation, known as “the cousins,” are more numerous.
Rockefeller was estimated to have met more than 200 rulers in more than 100 countries during his lifetime, and often was treated as if he were a visiting head of state.
Under Rockefeller, Chase — now known as JPMorgan Chase — was the first U.S. bank to open offices in the Soviet Union and China and, in 1974, the first to open an office in Egypt after the Suez crisis of 1956.
In his early travels to South Africa, Rockefeller arranged clandestine meetings with several underground black leaders. “I find it terribly important to get overall impressions beyond those I get from businessmen,” he said.
But Rockefeller took a lot of heat for his bank’s substantial dealings with South Africa’s white separatist regime and for helping the deposed, terminally ill Shah of Iran come to New York for medical treatment in 1979, the move that triggered the 13-month U.S. embassy hostage crisis in Tehran.
Rockefeller maintained the family’s patronage of the arts, including its long-standing relationship with the Museum of Modern Art, which his mother had been a fervent patron of. His private art collection was once valued at $500 million. The Rockefeller estate at Kykuit, overlooking the Hudson River north of New York City, is the repository of four generations of family history, including Nelson’s art and sculpture collection.
One of the major efforts of Rockefeller’s later years was directed at restoring family influence in the landmark Rockefeller Center, most of which had been sold in the 1980s to Japanese investors. He eventually organized an investor group to buy back 45 percent of the property.
His philanthropy and other activities earned him a Presidential Medal of Freedom, the nation’s highest civilian honor, in 1998.
Rockefeller and his wife, the former Margaret McGrath, were married in 1940 and had six children — David Jr., Richard, Abby, Neva, Margaret and Eileen. His wife, an active conservationist, died in 1996.

Today News/APP

Monday, 20 March 2017

Minister softens up 11 million workers for pensions blow

Man in British Steel hard hat
Cutting annual increases to staff pensions was suggested at the height of the Tata Steel crisis Credit: AFP
Millions of people with “final salary” pensions may have to accept cuts to their income as radical plans emerge aimed at saving thousands of struggling small funds.
Writing for this newspaper, the pensions minister hints that in future pensioners will have to accept reduced benefits to take the pressure off embattled funds.
For decades, the companies that back these schemes – where retirement income is guaranteed and based on salary and length of service – have struggled to keep them fully funded. Most are now in deficit, meaning the value of their pension promises outweighs the assets in the fund.
Some savers have been enticed to give up their final salary benefits by offers from employers to swap their guaranteed payments for lump sums up of up to 40 times the size of annual pensions.
Now, in the wake of the BHS scandal, which saw Sir Philip Green forced to pay £363m to fill a hole in the staff pension fund, the Government is looking for ways to ease the burden on firms by watering down benefits.
Richard Harrington, the pensions minister, explains why the system needs to be reformed. Britain is a “very different place” from when many of the schemes were set up, he says.
His stance today is in contrast to the tone of an earlier interview with this newspaper last September. Then, he said he was “very conscious of the fact” that final salary pensions were “part of an employee’s package and were used extensively as a way of recruiting staff”.
He added: “People were joining a company and were given a promise that was as much a part of their deal as their salary was.”
But now he concedes that savers will have to feel some pain if the system is to survive.
He writes today: “I have a very clear set of criteria in mind when it comes to the future of the defined benefit [final salary] sector. Any changes must balance the needs of consumers, employers and schemes and I don’t want to see it tipped in favour of one particular group.
“To restore confidence and build a more secure sector it’s vital that the interests of no one group dominate.”

50:50 chance of pension cut

A recent government consultation paper suggested that firms be allowed to freeze pension payments so they don’t keep pace with inflation.
That would save employers billions of pounds, while pensioners would find their income falling further and further behind rising prices. The Pensions & Lifetime Savings Association (PLSA), a pension fund lobby group, has estimated that there is only a 50:50 chance that the weakest schemes – which number in the thousands – will be able to pay out to members in full.
Part of the problem is that there are thousands of schemes, mostly set up decades ago when the companies that backed them were stronger and people didn’t live as long. They are often run inefficiently by part-time trustees who meet infrequently, and the industry regulator lacks the budget to oversee them properly.
The PLSA, among others, has suggested creating “super funds” that would enable employers to pay a one-off fee to absolve them of responsibility for the pensions. It said pooling assets in this way would protect pensions and make high-profile failures less likely.
Watch | Tips for managing your pension before retirement 02:25
But actuaries warn that companies could use the funds as a way to unfairly dump schemes they are perfectly capable of funding. Part of the reason final salary schemes are so valuable – and costly to employers – is that the payments are increased each year in line with inflation.
The rules vary from scheme to scheme, however, meaning that some pensioners have their payments lifted by the consumer prices index and others by the retail prices index.
One of the Government’s ideas is to allow trustees to override rules that prevent them from using the CPI, which is normally lower, or suspend increases entirely if the company is in financial difficulty.
A shift from increasing pensions in line with the RPI to using the CPI may sound minor but over the course of a normal retirement could result in pensioners receiving many thousands of pounds less. Cutting pension increases in this way was proposed at the height of the Tata Steel crisis.
The Indian parent company said the UK division’s £15bn pension scheme was draining resources and blocking a vital restructuring. Mr Harrington points out that public sector pension savers have already gone through such changes.
“CPI has already replaced RPI for the pensions of civil servants, the military, teachers, NHS staff and MPs,” he writes.
“And if using a modern and more accurate measure [of inflation] which still protects pensioners against rising prices also makes the scheme more sustainable in the long term, it is worthy of consideration.”
Because of the huge costs, the vast majority of private sector final salary schemes are now closed to new staff. However, almost all public sector workers – including MPs – still have the right to join their scheme.

Will your pension get swallowed by a “super fund”?

There around 6,000 final salary schemes in the country, but most are tiny and many are poorly run despite looking after billions of pounds of assets. Both the Government and the PLSA think giant “super funds” could be the answer.
The idea is that the pensions paid by super funds would be better than those offered by the Pension Protection Fund, a lifeboat scheme that guarantees the pensions promised by failed companies. It caps payouts for people yet to retire at 90pc and has an overall cap of around £38,000 for most people.
Under the PLSA’s plan, employers could pay to hand over responsibility for paying pensions to the super fund. Firms can already pay to have a scheme taken off their hands by insuring benefits with household names such as Legal & General – but the costs are extremely high, driven by rock-bottom interest rates.
Tom McPhail of Hargreaves Lansdown, the pensions company, said: “The terms of how weak employers can go into a super fund will be critical.
“For a super fund to be fair to the other participants you have to apply the same entry requirements, otherwise you’re just shifting liabilities.
“There is a recognition in the Government, PLSA and everywhere that we have too many schemes. It’s not a question of if we do it, but how we do it – and how much pressure is brought to bear to make it happen.”
Retailer Philip Green speaks before Parliament's business select committee on the collapse of British Home StoresĀ 
Sir Philip Green eventually paid £363m to help fill a hole in the pension fund of failed retailer BHS Credit: HANDOUT

I’m worried my employer will go bust – can I move out of the scheme?

You have the right to swap your final salary pension for a “defined contribution” plan at any time before you start to receive payments. Trustees have to give you a “transfer value”, normally guaranteed for three months. This will be a multiple of the initial annual income the pension would have paid you.
So £5,000 a year could be swapped for a £125,000 lump sum, for example. In the past transfer offers were typically around 20 to 25 times annual income, but in recent months offers have rocketed to multiples of 40 or more.
Giving up the guaranteed, inflation-linked income of a final salary scheme should not be done lightly, but defined contribution pensions have attractions too. You have far more control over your money, with the option of taking ad hoc lump sums.
And on death, unused funds can be passed indefinitely down the generations. In final salary schemes the pension normally ends with the death of the pensioner or surviving spouse.
The City watchdog requires you to take financial advice if the value of the transfer is £30,000 or more. Charges vary but 1pc of the transfer value is typical.
Telegraph Money has previously reported on readers’ struggles to find advisers prepared to recommend a transfer.
Some advisers have refused to carry out a pension switch because they did not think it was in the best interest of savers – or feared they might make a complaint in the future.
The Government’s consultation on reforming final salary schemes closes on May 14.

Culled from Telegraph

Friday, 17 March 2017

4 Places Where It’s Not Safe to Put Your Money Anymore - Megan Elliott

breaking bad money
Characters from Breaking Bad sleep on a pile of money | Source: AMC
Where do you keep your money? If you’re like 29% of Americans, it’s hidden in an old shoe box, buried under the towels in your linen closet, or tucked away in your sock drawer. An alarming number of people, including 41% of millennials, are keeping their savings at home, a 2015 American Express survey found, and more than half of savers have their cash squirreled it away in a “secret” location.
The old-school under-the-mattress savings technique appeals to people who use an envelope system for budgeting, as well as those who don’t trust banks. But it comes with risks, including the possibility your money will go missing.
“Hiding cash in a secret location is never a good idea,” Coleen Pantalone, associate professor of finance at the School of Business at Northeastern University, told Main St. You may forget where you put your money, or you could die, leaving behind clueless heirs who inadvertently sell the box with your savings at a garage sale.
Hidden in your home isn’t the only place where your money isn’t as safe as you think, especially if the savings vehicle is the wrong fit for your goals. Certificates of deposit (CDs) may seem secure because they earn guaranteed interest and are FDIC insured, but they’re the wrong place for a young person to put their retirement savings, because your return will be likely so low you’ll actually lose money to inflation. A 401(k) is good for retirement savings but a terrible place to keep your emergency fund because you can’t easily get at the money and you’ll pay penalties for early withdrawals.
While the best place to keep you money depends on your situation, there are some places where it rarely, if ever, belongs. Here are four places where you shouldn’t keep your money.

1. Under your mattress

Money Stuffed in the Mattresses
Money stuffed under a mattress | Source: iStock
Before there were banks on every corner, many Americans had no choice but to keep their savings at home, but those days are long gone. While having some cash on hand for emergencies is smart, stashing your life savings under your mattress or in an old coffee can is a recipe for disaster. Money left moldering under your bed is actually losing value, since you’re not earning any interest to keep up with inflation. Not to mention the risk of losing your nest egg to theft, fire, or some other disaster. If you must keep your savings in cash, at least put it in a safe deposit box (though most banks discourage this). Or take a cue from Walter White and hide it in a storage locker.

2. In a savings account

piggy bank with coins
Savings, piggy bank |
Saving regularly is a responsible money move, but stashing your cash in a traditional savings account may be causing you to lose money. The average savings account was earning a measly 0.06% in interest in July 2016, according to the FDIC. Even at today’s relatively low inflation rates, that’s still not enough for your savings to keep up.
While savings accounts are a fine place to keep relatively small amounts of cash you’ll need in the short-term, they’re not a great place to keep your entire nest egg. For retirement and other long-term goals, you’ll need to look for investments that generally offer better returns, like stocks. But you do want some money in an easily accessible account so you can cover unexpected expenses like an emergency car repair. To earn a better return on your savings, look for higher-interest accounts from credit unions and community banks, or find a high-yield checking account.

3. Collectibles

Beanie Babies on a shelf
Beanie Babies sit on a store shelf | JOYCE NALTCHAYAN/AFP/Getty Images)
Remember the Beanie Baby craze? In the late 1990s, people were so wild about these little stuffed animals that they bought them by the thousands, and rare beanies sometimes sold for thousands of dollars. One father “invested” more than $100,000 in Beanie Babies, only to see his savings vanish when the fad petered out. It’s a reminder that while collecting may be a fun hobby, it’s a risky place to keep your life savings.
“[T]he only way to make money investing in collectibles is to find someone who is willing to pay more for them than you did,” Gus Sauter, a senior consultant to Vanguard Group, told the Wall Street Journal. That can be a lot harder than it sounds, especially if the market for your collection dries up (see Beanie Babies). Plus, if you have an emotional attachment to your collection, selling it when you need cash can be difficult. That doesn’t mean you shouldn’t spend your money on rare comic books or signed first editions, but you should realize what you’re doing isn’t an investment.
Buy what you like because you might be holding it a long time. When you do sell, consider yourself lucky if you make a profit,” Rick Ferri, the founder of Portfolio Solutions, told the Journal.

4. Penny stocks

wall street sign
Wall Street sign, stock market | STAN HONDA/AFP/Getty Images
Buying penny stocks has never been a smart investment. These bargain-basement stocks in small companies trade for under $5 a share. Information about the companies and their financials is hard to come by, and the stocks are usually sold over-the-counter, which means they don’t have to meet the same requirements as stocks sold on exchanges like the NYSE, Investopedia explained.
While the prospect of snapping up thousands of cheap shares before a stock takes off makes penny stocks tempting, they’re a high-risk investment. The chances of the company whose penny stock you’re buying turning into the next Google are slim, and they can be difficult to sell. Worse, scammers sometimes talk up an ultra-cheap stock to artificially inflate the price, then sell their overvalued shares just before the stock’s value collapses, a scheme known as “pump-and-dump.”
“Investors in penny stock should be prepared for the possibility that they may lose their whole investment,” the SEC warned.

Culled from Money & Career Cheat Sheet

Thursday, 16 March 2017

NPA retirees stage protest over unpaid pension arrears

Hundreds of retirees of the Nigerian Ports Authority (NPA) on Wednesday staged a protest at the Marina Headquarters of the organisation over what they called non-payment of their enhanced pension benefits. The protesters had converged on the towering office in the morning, carrying placards with various inscriptions such as “NPA pay us our benefits“, “Ms Hadiza, our pension is our right“ and so on.
Some of the placards read: “NPA Management pay us as you have been paying yourselves’’..
Other inscriptions are: “Your enjoyment is our labour, pay us’’; “Harmonise our pension benefits’’ and “Hadiza, Woman of Integrity’’.
There was gridlock on the ever-busy Marina road for several hours as the protesters lined both sides and chanted songs demanding for the immediate payment of their enhanced pension arrears.
It took the intervention of policemen from the Port Police Unit and NPA security personnel to move some of the protesters off the road and restored traffic to normalcy.
A Spokesman for the pensioners, Mr Charles Binitie, said their action became inevitable after repeated efforts to get the enhanced arrears paid had failed.
“What we are doing today is not to fight the NPA management but to let them see the need to pay enhanced pension benefits to retirees.
“You see, most of our members are going through untold hardship because our pension has not increased for the past 15 years contrary to the law.
“The constitution says pensions should increase every five years but what NPA retirees have been getting since early 2,000 is the same thing. No increment.
“So, what we are demanding is the arrears on the normal increment that should have been added on our pension benefits to enable retirees cope with life“, he said.
Binitie said the retirees under the aegis of “Concerned Pensioners of NPA“ had made appeals to successive administrations of the organisation on the need to pay the enhanced pensions with no success.
He said though the Managing Director of NPA, Ms Hadiza Usman was still new in the system, she should look into the issue raised by retirees without delay to alleviate their sufferings.
Binitie said that for 10 years, the management of NPA had not been able to increase their pension. .
“We have over 11,000 pensioners of NPA all over country.
“We have been meeting with officials of the Federal Ministry of Transportation and now we have decided to come to NPA to express our feelings.
“We are planning to shutdown all the ports in Nigeria if they refuse to fulfil our demands,’’ Binitie said.
He commended the Management of NPA under the leadership of Ms Hadiza Usman for listening to their demands and for promised positive response.
Binitie also commended the efforts of the pensioners who trooped out to express their rights and engage in peaceful demonstration.
Also speaking, Mr Austin Adaridho, an Ex-executive member of NPA staff Union, said most ex-workers of the organisation had not been finding life easy owing to non-implementation of the enhanced pension.
The 2007 retiree said some pensioners got as little as N10,000 monthly, pointing out that the amount was too little for retirees to feed themselves let alone meet their other needs.
“We are calling on the NPA Management to implement the 33 per cent pension increment by the government and save retirees from dying .
“Things have been so difficult for some of the old workers,
“We are begging the management to reward our labour and show little appreciation for our contributions to the organisation,“ he said.
Adaridho said the retirees were fed up with excuses and could resort to actions that the NPA management would find embarrassing if nothing was done.
The NPA managing director assured that all pensioners qualified for pension increase in line with Federal Government Constitutional provision would enjoy same.
In her address to the representatives of the concerned pensioners of the NPA, she said that a committee would be set up to work out the details of the payment.
Usman said that the Authority “operates a salary structure different from the Federal Government Harmonised Public Service Salary and its associate structures’’.
She said that the Management assured the pensioners of monthly payment of pensions, saying that a mechanism would be put in place to guarantee adjustments that would be sustainable.

PM News

Adeosun settles rift between pension regulator, insurance regulator

Minister of Finance, Kemi Adeosun
Minister of Finance, Kemi Adeosun

The Minister of Finance, Kemi Adeosun, has intervened and brokered a resolution to the dispute between the National Pension Commission (PenCom) and the National Insurance Commission (NAICOM) over a circular issued by PenCom directing life insurance companies to transfer their annuity asset holdings to Pension Fund Custodians (PFCs).
At a meeting convened by the Minister between the Director-General PenCom, Chinelo Anohu-Amazu and NAICOM Chief Executive, Mohammed Kari, both parties agreed to issue a joint circular by Tuesday that would supersede all previous circulars issued by the two regulatory agencies on the annuity matter.
The dispute was fanned by a circular issued by PenCom in November last year, directing life insurers to transfer custody of their annuity assets to PFCs and inform the commission accordingly.
The insurers were also required by the circular to suspend approving new requests for annuity pending the transfer of assets to PFCs.
The minister noted that the Federal Ministry of Finance had received several complaints from pensioners in relation to the outstanding dispute. She drew the attention of both parties to the adverse impact the current situation is having on pensioners and reiterated that a prompt resolution of the matter is paramount.

Premium times

Wednesday, 15 March 2017

Edo govt begins registration of unemployed persons-Stephen Efiezomor

Edo govt begins registration of unemployed persons
Edo Gov. Godwin Obaseki
The Edo state government has commenced the registration of unemployed persons in the state in a bid to fulfilling its promise of creating 200 thousand jobs.
The Managing Director of the Information Communication Technology Agency of the Edo state government, Lambert Ugorji, confirmed this in Benin City, the Edo state capital.
He said the idea is to know the various skill-sets in the state so as to identify those that require training.

Mr Ugorji also added that the state government was working towards creating a database for companies being established in the state to draw from.
“Many of them can go online and fill their data and then we can now go ahead and gather their bio-metrics onsite and the database is evolving.
“The next phase of this is when you gather the data, you analyze the data and know the ones that will need help.”
The registration is expected to be concluded on April 17 2017.

Culled from Today News