FSA confirms pension KFI changes

The Financial Services Authority (FSA) has confirmed changes to rules relating to mortality projections in pension key facts illustrations (KFIs).

The requirements set out the mortality assumption for firms to use when illustrating a future annuity within a KFI.

Earlier this year, the regulator proposed changing the assumption by updating it for improved longevity and aligning it with the basis used by the Financial Reporting Council (FRC), so that the mortality basis for KFIs is consistent with that for annual pension statements.

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Few employers understand AE duties – DWP

Only one in ten employers understands how to discharge their duties under auto-enrolment, Department for Work and Pensions (DWP) research has found.

The department’s in-depth evaluation report on the workplace pension reforms found awareness varied by company size.

Just under three-fifths of large employers said they understood their obligations, compared to less than half of medium-sized employers and only 6% of micro employers.

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Plan or face 55% pension tax warns Skandia

‘Worrying’ numbers of people are not using their pension savings efficiently leaving potential inheritors liable to a hefty tax, according to Skandia.

Adrian Walker, Skandia’s pension expert said: “The number of people currently in drawdown and not taking an income highlights just how many people could benefit from further financial planning.”

Skandia data shows 59% of customers in capped drawdown are not taking an income. In these cases customers have taken the maximum tax-free lump sum and have left the rest of their fund invested.

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