Following the recent news pertaining to workers being offered a new type of guaranteed pension, forensic accountants are waiting to see what effects these new changes will have on their services.The news, which is set to effect private sector workers, relates to the replacement of final-salary pensions with a fixed amount when workers agree to work longer.
The announcement, made by the government pensions minister Steve Webb, was seen to be made in light of the private sectors reluctance to align with the old system put in place by the previous administration.
Welcoming the measures, Mr Webb said that these new measures of certainty would “offer greater flexibility to firms” and alleviate the pressures on employees in the face of the current economic climate.
For forensic accounting services, where pension losses play a key head of damage in personal injury claims, these new measures look set to be anticipated with a certain level of caution.
With disputes over final salary pension schemes making up a large part of the working climate in forensic accountancy, it’s expected that the industry will play close attention to how these changes pan out.
Having faced scrutiny from many companies who argue that the lack of financial support from the Government will cause problems, the options for workers appear vastly different to those offered before.
A forensic accountant should now familiarise themselves with three new options, according to the new scheme.
The first involves a situation whereby the employer guarantees the total value of a workers pension pot upon retirement but with the stipulation that the worker buys an annuity that pays their annual income.
The second option, which involves the guarantee of a minimum annual income amount subject to rise if pension fund investments do well, is slightly more flexible in nature.
The final scheme involves cases where workers agree to retire later, when a fixed amount is set for the point of retirement and the worker agree to work to their average life expectancy minus 20 years.
Final-salary pensions, of which six million older workers currently receive and benefit from, are, according to official estimates, not expected to be offered beyond 2018.
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