Goldman Sachs bows to pressure on bonuses; Deutsche Bank pools pension assets; Top British earners lose more pensions tax relief.
Goldman Sachs bows to shareholder pressure on bonuses Goldman Sachs was expected to unveil bumper year end packages thanks to anticipated record profits just a year after taking US$10 billion ($10.95 billion) in government aid. However, bowing to shareholder pressure, the bank has suspended cash bonuses for 30 of its top executives, who will receive their compensation in stocks over a five year period instead. Those shares may also be clawed back under a new provision if employees are judged as engaging in "materially improper risk analysis" according to a press release issued by the bank. The bank also agreed to impose a "say on pay" practice where investors can vote on executive compensation. "By subjecting our compensation principles and executive compensation to a shareholder advisory vote, we are further strengthening our dialogue with shareholders on the important issue of compensation," Lloyd Blankfein, Goldman Sachs chairman, said. According to the Wall Street Journal, Goldman Sachs bankers were set to earn as much as US$800,000 ($876,107) each. Final bonuses for employees outside the 30 person management committee will be announced in January.
Deutsche Bank pools pension assets Created for multinational group benefit plans, cross border pension pools are being embraced by more money managers. Financial News reports that Deutsche Bank has confirmed plans to set up a single global pension pool bringing together its existing pension assets. The bank, which has an estimated €9 billion ($14.4 billion) in pension assets globally, began to move its €6 billion ($9.6 billion) in German assets in May this year to create a pension pool based in Luxembourg. It is also looking to migrate pension assets from its Netherlands, Belgium and Switzerland plans and will look at options for its US and UK plans. Deutsche Bank will partner with State Street as administrator for the pension pool.
Global pension consulting firms to merge Consulting firms, Towers, Perrin, Forster & Crosby and Watson Wyatt received approval from the European Commission for their €2.3 billion ($3.7 billion) merger in December. Announced in June this year, the merger will create one of the largest employee benefits consultancies globally. As part of the merger agreement, Watson Wyatt will sell off its insurance actuarial software business, VIPitech.
Standard Life revives personal pension plan Standard Life will return to the personal pension market next February with the launch of its Active Money Lifeplan. The Scottish insurance and pensions group has focused on self-invested personal pensions (Sipps) since launching an in-house administered Sipp in December 2004. Earlier this year it announced plans to increase fees on its Sipp to £240 a year ($427.2) - up from £208 ($370.3) - from April 2010. The new personal pension plan will be built around Standard Life's existing Sipp and target employees in the 25 to 40 age bracket earning around £45,000 ($80,106) a year.
Top British earners lose more pensions tax relief In his April Budget, UK Treasurer Alistair Darling raised the highest tax rate in the UK to 50 per cent and restricted tax relief to workers earning £150,000 ($267,021) and more. Now the Treasury has extended those restrictions to cover gross income where an employer contributes to a pension plan, affecting employees earning less. The government will impose a personal tax charge in pension schemes from April 2011 on a sliding scale where a salary of £150,000 ($267,021) will have tax relief reduced to 40 per cent and a salary of £180,000 ($320,425) will attract only the basic relief rate of 20 per cent. The Treasury also announced in December that it would levy a one-time tax of 50 per cent on bankers earning bonuses in excess of £25,000 ($44,503).
