UK roundup: 300 Club, FTSE 350 contributions, accounting standards, PPF

first_imgSally Bridgeland, former chief executive of BP Pension Trustees, has become the 14th member of the 300 Club of top investment professionals from different countries – the first woman to do so.The 300 Club, set up nearly three years ago, aims to raise awareness about the potential impact of current market thinking and behaviours.Bridgeland said: “The demands of maturing pensions funds will change considerably over the next decade, and individual savers need an investment environment they can trust for the longer term.” The 300 Club was right to challenge current thinking, she said.  “I hope to contribute to the debate they have started,” she added. Bridgeland was chief executive of BP Pension Trustees for seven years until she left the £19bn (€23.8bn) UK corporate pension fund at the beginning of April.She recently took on the role of senior adviser to governance consultancy Avida International. Bridgeland is the founder of the charity Executive Shift and a fellow of the Institute of Actuaries, as well as a member of the FTSE Policy Group. Before joining BP Pension Trustees, she worked at consultancy Aon Hewitt for 20 years.The 300 Club is chaired by Lars Dijkstra, CIO at Kempen Capital Management.The club’s name refers to the legendary 300 Spartans who held off the far larger Persian army at the Battle of Thermopylae in 480 BC, and is meant to symbolise a small group achieving something against the odds.Meanwhile, new research shows that, even though pension deficit contributions made by the firms in the FTSE 350 are at their lowest for five years, they still amount to nearly 40% of their Total pensions bill.The research done by consultancy Barnett Waddingham showed that the total IAS19 deficit reported by FTSE 350 companies in 2013 was £55.6bn, down £7.6bn from the aggregate shortfall from the year before.Deficit contributions paid last year were £8.5bn, down more than 20% from 2012.Nick Griggs, head of corporate consulting at Barnett Waddingham, said: “The fact 37p of every pound spent by companies on pensions is paid towards clearing pension deficits is striking and illustrates just how much companies are still having to pay to reduce funding shortfalls.”However, Griggs said the overall picture for defined benefit funding in 2013 had improved somewhat, with deficit contributions apparently putting less of a strain on company finances.“With TPR’s (the Pensions Regulator) new funding code of practice promising to be less restrictive on corporates going forward, directors should be optimistic about the future,” he said.The study showed the effects of auto-enrolment coming through for the 350 largest listed UK companies, with defined contribution costs increasing by an average of 16% compared with 2012.In other news, Aon Hewitt said changes that have been proposed to pensions accounting standards could take more than £25bn from the balance sheets of companies in the FTSE 350, and £1bn from their annual profits.As things stand, about 25% of the top 350 listed UK companies have an accounting surplus relating to their pension scheme, which is recognised on their balance sheet.Proposed changes to the IFRIC14 guidance, which supports international accounting standard IAS19, mean surpluses will no longer be recognised unless there is a realistic expectation the company will eventually be able to access it.Simon Robinson, principal consultant at Aon Hewitt, said: “We expect most companies with schemes that already have a surplus will not be able to recognise it under the new proposal – which would reduce the balance sheets of the FTSE 350 by £8bn.”But the proposal also affects companies making ongoing deficit contributions that are expected to have an accounting surplus in future, he said. “These contributions,” he added, “would now need to be recognised as liabilities on corporate balance sheets, which would amount to a further £20bn hit for FTSE 350 companies.”Finally, funding among UK defined benefit (DB) schemes has fallen by 1 percentage point over the last month, according to the Pension Protection Fund’s (PPF) 7800 Index.According to the index, funding fell to 90.5% at the end of July, with the aggregate deficit increasing by £23.7bn to £122.7bn over the same period.“The position has worsened from the previous year, when a deficit of £88.3bn was recorded at the end of July 2013,” the PPF added.The funding decline was despite assets increasing by 0.5% in value month-on-month and an overall increase of 4.2% in asset value since July last year.However, this contrasted with a 6.7% increase in liabilities, from £1.21trn to £1.29trn at the end of last month.last_img read more

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Premier League big guns reload as transfer arms race heats up

first_img0Shares0000Manchester City have embarked on an historically lavish spending spree, including paying £52 million for Monaco’s French International Benjamin Mendy in a world record deal for a defender © AFP/File / FRANCK FIFELONDON, United Kingdom, Jul 26 – Premier League spending looks certain to shatter all previous records before the current transfer window closes as England’s superpowers reload in an increasingly frenzied arms race.Fuelled by lucrative television contracts, currently worth around £8.3 billion ($10.8bn, 9.3bn euros) and unprecedented revenue streams at home and overseas, the 20 Premier League teams have spent like never before in the weeks since the summer transfer window opened. Already close to £800 million has been paid for new players, with the single window record spend of £1.2 billion well within reach with over a month before the market closes.Determined to make amends for last season’s surprisingly lacklustre debut campaign in the Premier League, which saw Manchester City finish 15 points behind champions Chelsea, Pep Guardiola has played a key role in driving the market sky high.City boss Guardiola, backed by his club’s Abu Dhabi-based billionaire owners, has embarked on an historically lavish spending spree, including paying £52 million for Monaco’s Benjamin Mendy in a world record deal for a defender on Monday.Manchester City completed the signing of Real Madrid’s defender Danilo on July 23, 2017 © AFP/File / PIERRE-PHILIPPE MARCOUMendy’s arrival came just days after the £26.5 million capture of Danilo from Real Madrid.England right-back Kyle Walker cost City £50 million from Tottenham as Guardiola took just 10 days to spend £128 million on three full-backs.A £42 million offer persuaded Monaco to sell Bernardo Silva to City, while Douglas Luiz moved to Eastlands from Vasco Da Gama for £10 million.Throw in Guardiola’s £34 million swoop for Benfica goalkeeper Ederson and the Spaniard has already splashed out £215 million.That eclipsed the record spending total for a British club in a single transfer period, racing past the £168 million mark which, not surprisingly, was also set by Guardiola last season.City seem certain to shatter the £221.5 million forked out by Real Madrid in the summer of 2009 – which stands as the biggest outlay in one transfer window.Guardiola would love to land £50 million-rated Arsenal forward Alexis Sanchez, who is refusing to extend a contract that expires in 12 months’ time, by the time the Premier League begins on August 11.– Astronomical –Keen not to be left behind by City, Chelsea manager Antonio Conte has been pressuring Blues owner Roman Abramovich to back his demand for major investment ahead of his side’s return to the Champions League after a one-year absence.Premier League champions Chelsea completed the signing of Real Madrid’s striker Alvaro Morata on a five-year-deal on July 21, 2017, in a deal reported to be worth up to $92.2 million © AFP/File / ROSLAN RAHMANSo far, Chelsea have spent over £120 million, with their headline deals a £58 million move for Real Madrid striker Alvaro Morata and a £34 million swoop for Monaco’s Tiemoue Bakayoko.Manchester United manager Jose Mourinho had to pay a British record £75 million to beat his old club Chelsea to the signature of Everton’s Belgian forward Romelu Lukaku.That deal, following the £31 million signing of Benfica’s Victor Lindelof, moved United over the £100 million mark.Arsene Wenger’s decision to extend his 21-year reign at Arsenal after a turbulent season has persuaded Gunners owner Stan Kroenke to sanction the club record £52 million signing of Lyon striker Alexandre Lacazette.Liverpool also broke their transfer record, paying £37 million for Roma winger Mohamed Salah.And, in a perfect encapsulation of the Premier League’s spending power, even Everton, notoriously careful with their finances in the past, have paid over £90 million as they lured Wayne Rooney, Michael Keane and Jordan Pickford among others to Goodison Park.Newly promoted Huddersfield and Newcastle have both spent over £30 million already, while only Tottenham and Stoke have yet to get the chequebook out.While some look at the astronomical fees being paid and wonder if the desire of English clubs to flex their financial muscles could one day prove fatal for some of the less historically successful teams, the Premier League’s executive chairman Richard Scudamore insists the spree remains sustainable.“Profitability is improving. The most important thing is player costs as a percentage of turnover,” Scudamore said last week.“We’re down in the early 60 percents and we were much higher 10 years ago. Sixty per cent of turnover spent on player costs is actually very manageable.”Scudamore’s message is carry on spending and there’s little doubt his league will rise to the challenge.0Shares0000(Visited 1 times, 1 visits today)last_img read more

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