News & Events

At Ease - pensioners' newsletter
Autumn 2001

This is a text version of the newsletter. A full colour version can be viewed  (page 1, page 2, page 3, page 4, page 5, page 6)  

Avon Pension Fund is pleased to welcome you to the Autumn 2001, third issue of 'at ease' – our newsletter for pensioners of the Fund.

In the last issue, a questionnaire was included with a number of the newsletters. We wanted to get a better idea of what you, our readers, want from at ease. We are delighted by the results of our survey, which are shown on this page. You also kindly gave us your ideas for other items we could include in future issues – crosswords, information about local groups, articles about members and their activities. Many thanks to those of you who responded. We will do our best to take on board your feedback and include articles, items and offers of interest and relevance to you.

On the back page of this issue, you will find highlights from the Fund’s 2000/2001 unaudited accounts. Copies of the full Annual Report & Accounts will be available shortly in libraries throughout the former Avon area.

The last financial year was exceptional in that it was the first year since 1988 that Local Authority Pension Funds recorded a negative return on their investments. This was caused by heavy falls in world equity markets. Although bond market returns were positive, the benefit from this source was limited, because, for actuarial reasons, funds have proportionately less money invested in bonds than in equities.

You need not be concerned even if the Fund is shown to no longer be in surplus, because, as a member of the Local Government Pension Scheme, your pension benefits are guaranteed, irrespective of the funding position of the Avon Pension Fund. In addition, the Pension Fund looks to secure long-term security and growth from its investments, and should not be overly concerned about a single year of poor or negative returns. Nevertheless, we all hope that equity markets, and the world economic situation, will stabilise sooner, rather than later.

Enjoy this issue,

Do you currently receive a pension from Avon Pension Fund and have taken or are considering taking further employment? If so, you will want to know if your pension is affected.

Unless you were retired by reason of ill health, efficiency, redundancy or your employer had agreed to the early release of your pension, your pension will not be affected. Nor will it be affected if you take up further employment outside local government.

If you were retired for any of these reasons and you take up further employment with an employer participating in the Local Government Pension Scheme, your pension may need to be reduced or suspended. This applies if the combined annual income from your new employment and your Local Government pension exceeds your pay immediately before your retirement.

Should you become so employed, you are required by the Local Government Pension Scheme Regulations to:

• tell your employer that you have a pension from the Local Government Pension Scheme and

• write to us giving full details of your further employment.

It is important you immediately notify your employer and us to ensure your pension is not overpaid, as you will have to pay the money back.

The amount of your Local Government pension that you can keep while you work may change if you have:

• a pay rise backdated to when you started your post retirement work and/or

• a change in the conditions of your post retirement work, for example, a pay increase due to promotion or a change in the number of contractual hours you work.

This article provides only basic information regarding how your pension may be affected should you become re-employed. For further details,  have a look at our leaflet ‘Re-employment – How your Pension is Affected’. The article entitled ‘A lifetime guarantee’ in this newsletter looks at the issue of working beyond retirement age.

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Angela Maxwell, State Benefits and Retirement Consultant, gives us an update on the new legislation and this year’s budget.

The Benefits Agency has introduced a new way of claiming the state Retirement Pension (RP). This has been done because research has shown that many RP customers seek help with the claim form (BR1), as they find it lengthy and over complex. People approaching state retirement age, (currently 60 for women and 65 for men), should be automatically contacted by letter four months before their birthday. To make your claim you can either:

The Benefits Agency hopes the new service will reduce the need to frequently approach customers for further information and reduce the need for claimants to supply evidence of birth, marriage or divorce certificates, which the Benefits Agency has already seen and verified for other purposes. If you don’t hear from the Benefits Agency at least three months before your birthday, it is always advisable to check that you have not been forgotten!

The first stage of the government’s plans for free nursing care came into effect on 1st October. People who currently pay for their own care in nursing homes will have the cost of the nursing element taken over by the NHS from that date. There are three proposed levels of payment according to the amount of care required. Each patient will have his or her needs assessed by a registered nurse who will decide which band of care is appropriate. The current bands are £110, £70 and £35 per week. These amounts may change at the end of the government’s consultation period. The NHS will have a duty to provide more care if someone’s needs are higher than the top level of funding. A leaflet outlining these proposals for the public is available from your local health authority.

In Scotland only, the elderly will receive help in funding personal care as well. If they live at home it will be free, but, if in care, patients will receive up to £90 per week to meet costs.

Nursing care of £65 per week is also to be introduced and a Bill is due to be passed in October by the Scottish Executive, which will confirm implementation of both measures in April 2002.

Discussions are still taking place regarding the position for those who move south to be nearer their families whilst having their care costs subsidised. People moving north of the border will not be entitled to the subsidy!

If you are going abroad on holiday, Attendance Allowance can be paid for up to 26 weeks of any absence from the UK, as long as your absence is temporary. This can be extended if you go abroad to receive treatment for a medical condition and intend to return to the UK. If Attendance Allowance began before June 1st 1992, it may be payable indefinitely while in another European Economic Area country. Check with your local Benefits Agency to see if you qualify.

It is worthwhile reminding those aged 60+ on low incomes with a small amount of savings that the capital limits in order to be eligible for the Minimum Income Guarantee (MIG), have increased to £12,000, upper limit and £6,000 lower limit. You do need to re-check your finances and those of elderly relatives as many could now be entitled but may be unaware of the change.

The government has promised to equalise the age of entitlement to concessionary bus passes but it will not take full effect until April 2003! One million men aged 60-64 are expected to benefit. The government scheme, which currently only applies to state pensioners, (i.e. men from 65 and women from 60) and people with disabilities, came into force on 1st June this year. It requires all local authorities to offer schemes at least as generous as half-price bus fares, with a free travel pass to claim the concession.

People like working: it’s official. Spending your whole life working towards retirement can often be a bit of an anticlimax when all of a sudden you find yourself with nothing to do and no workplace to go to. Workers are becoming increasingly reluctant to give up work at 60 – particularly with life expectancy at birth now at 75 for men and 80 for women. That’s a long time to sit on your hands. The good news is that governments around the world are recognising this is an issue, and soon it may not be long before extending retirement age is as natural as breathing.

There are lots of different kinds of retirement age, which makes the issue of when to retire somewhat murky. Only one is compulsory, and that’s the one that says everyone must purchase an annuity by the time they’re 75. You may claim your basic State Pension at 65, and the guidelines set by the government for the retirement age for employees is 60 for women and 65 for men. This last retirement age guideline is set to change, however. According to a spokesperson for the DSS, a ruling has been passed that will call for the equalising of the recommended retirement age for men and women in employment. There is a long lead-in time for the initiative, but steps will be taken from 2010 and by 2020 the official retirement age guideline for everyone will be 65.

A lot of people are under the impression that they are obliged to retire at 65, but this is not the case. Nor do you have to delay your claims to your basic State Pension. State Pensions are pretty flexible, if you wish to claim it at 65 and continue working full or part time, you may do so, although you will not be able to make any more contributions to it through tax and national insurance. If however, you want to delay your claim, you may do so, with no penalty. If you’re concerned about possible tax implications you have nothing to worry about. Even if you choose to work full time and claim your state pension, you will not be liable for a reduction in those payments. (For more information on the rules concerning employment and basic State Pension scheme, go to www.pensionguide.gov.uk, or call the Citizens Advice Bureau).

However, this may not be the case with any additional pensions you hold, such as your Local Government Pension. The rule used to be that if you had retired and were receiving a pension from the Local Government Pension Scheme and subsequently found full or part time work with an employer who operated the Local Government Pension Scheme, your pension payments would be cut back by the amount that your current earnings (your income after you had retired), plus your pension payments exceeded your income on retirement. Put simply, if your salary on retirement was £16,000 and you ended up with a pension of £8,000, your earnings after retirement could only be up to an additional £8,000 before penalty, because that would mean an annual income of £16,000 – the same as your income just before retirement.

If you earned, for example, £9,000 at work, bringing your total income to £17,000 including your pension payments of £8,000, your pension would be reduced by £1,000 (the difference) until such time as you either stop work, or your earnings reduce your income to the same amount (or less) that it was when you retired.

In 1998, this changed and now each Local Government Fund has introduced its own abatement rule. These vary from fund to fund, some do not place a limit on your earnings, meaning you are free to earn as much as you like without penalty and some have kept the original rule in place. You are advised to check with your own Fund.

Americans are renowned for the scrupulous care they take of their teeth, but the Brits have a reputation for being a bit slack in the dental department. The state of the nation’s teeth has launched far-reaching debates about standards, funding and how to ensure a cavity-free future.

Waiting lists, registration difficulties, emergency treatment and the lack of a regulatory body suggest that things could be better about our dental care provision. Recently, the General Dental Council (GDC) began a review of its ethical guidance that is sent to all dentists upon registration (entitled Maintaining Standards), offering recognition of the changes in dental care and provision. Professor Wilson of the GDC noted that British dentistry is entering a new era, "The Council is acutely aware of the changing circumstances under which many members of the dental team are practising. The current guidelines are aimed very much at the sole practitioner...(and) do not recognise that there are now a wide variety of employment situations".

The General Dental Services Regulations say that a dentist cannot mislead a patient about the quality of care available – be that NHS or private care. This works both ways – a dentist may try to convince a patient that private care is better, when in fact the two may be much the same. All this points to a growing awareness amongst those in power that an overhaul of dental services is required. The first steps are now being made to meet future needs.

Since the government cut dentists’ fees in 1992, private practice has become the preferred option for about 70% of all new graduates taking part in a survey conducted by the British Dental Association (BDA) in April this year. According to the BDA, dentists leave the NHS because they are finding it increasingly difficult to provide an acceptable quality of care and still run a viable business. The industry needs a cash injection of at least £100 million every year for the next five years in order to bring NHS care up to scratch, maintains the BDA. Prime Minister Tony Blair has awarded £4 million to the Dental Care Development Fund, in order to enable those not currently registered with a dentist, to find one.

The funding will also produce benefits by allowing Health Authorities more involvement in how spending is allocated, cutting red tape and freeing dentists to spend more time with their patients.

To date, the fifty year-old dentistry system has been perfectly adequate. With overall improvements in oral health, calls for greater funding are more of a preventative measure than a remedial one. The General Dental Services Committee is concerned that although standards of care have moved on in private sector dentistry, they have not been as marked in the NHS.

Changes are gradually beginning to make a positive effect on the NHS, but the standard of treatment may vary across the UK. The BDA is encouraging dentists to be open to patients and explain about the treatments they offer. Practices based in a high-cost area such as London, may have problems, but others in cheaper areas, or those who have received an Investing In Dentistry grant, may offer top-class patient care.

For those who can afford it there is a choice. Around one million people in the UK have purchased private dental plans, either in the form of capitation (the patient pays an agreed monthly sum after registering with a dentist who is a member of the same scheme), insurance (the patient pays a premium depending on age and circumstances) and company (the patient pays in full and claims the whole amount back through the plan provider) schemes.

So, where does that leave the bulk of the nation whose teeth remain in the care of the NHS? This current financial year should see £35 million of investment to modernise NHS dental practices: that will mean a better experience for patients. More dentists are entering the profession year on year but are devoting more time to private practice. £18 million is going to reward dentists’ commitment to the NHS to try and reverse this trend.

But the government does recognise that NHS dentistry is going to have to evolve. Developing contracts with NHS Primary Care trusts, independent organisations and individual dentists will mean that in the future we will be exposing our molars to a wider range of dental-care providers than in the past.

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For centuries people have been divided into two camps when it comes to handling money: capitalism or philanthropy. Now it’s not so clear cut – thousands of people are making money and keeping their conscience clear by investing in companies that are socially responsible.

Previously, most of us thought we’d never be able to make a difference to the negative effects that some industries have on the environment. Now there are investment portfolios that have been set up to do precisely that. By investing in these funds, you are investing in companies that have pledged to be more environmentally conscious and socially responsible than most. The performance of funds like these has been steadily improving, which means that investors are making money and corporations are under pressure to go green, or risk losing out.

It’s difficult to prove industry’s link to the present climatic problems. The difficulties scientists face in proving this means that the potential consequences of global warming are still being debated. We know the earth is getting warmer, but we do not know if it is solely down to human activity, or partly as a result of the natural order of things. President Bush recently refused to sign the Kyoto Protocol (a UN treaty on climate change that has been under discussion since 1992); he then commissioned the National Academy of Sciences in America to produce a report on global warming. The results showed that the changes over the last few decades are probably down to us, but that natural variability could not be totally ruled out as a contributing factor. It was also stated that temperature rises are expected to continue.

There is no single definition for ‘investing for good’ as yet, but the Financial Services Authority (FSA) will be taking responsibility for regulating the funds that come under the ‘ethical’ umbrella. There are many different terms for this kind of fund and all are largely interchangeable, according to the FSA, but there are subtle differences. Among the most common are terms such as ethical investing, socially responsible investing (SRI) and green funds. They all tend to adopt a sustainable investment focus. Those portfolios known as green funds have a different emphasis to funds with a broader ethical area. Green funds, for example, will focus on companies specialising in improving the impact that industry has on the environment. That might include renewable energy suppliers or companies that use renewable energy such as wind turbines or solar power. Socially responsible companies may focus on improving working conditions, and so on.

Each fund manager sets his or her own criteria for ethical or green portfolios and these criteria must be made available to investors so that they know exactly where their money is going. The UK Social Investment Forum says that the ethical investment community is keen to encourage innovation, whilst urging caution when doing so. It advises that the more specific fund managers are about the criteria for their ethical funds, the better.

There have been strong correlations between sound financial performance and environmental performance and this offers one explanation for the increasing popularity of green funds. But perhaps more intriguingly, investor profiles have also changed. A wider range of people are likely to be interested in contributing to companies with ‘caring’ portfolios. Perhaps green funds not only offer a challenge to traditional economic doctrine but also the machismo of international finance?

Although the significance of global warming is uncertain, there are strong indicators that the change in climate will be noticeable. Even now, summers just ain’t what they used to be. According to the Met Office, the most significant changes will include alterations in the distribution of rainfall. ‘Net rainfall is unlikely to increase, says a spokesman; ‘but more of it will occur during autumn and winter, increasing the potential for flooding. Also, countries suffering from drought, such as Bangladesh, will only get drier. The melting of ice in the arctic will not only contribute to rising sea-levels, which will pose a threat to coastlines and low-lying land such as the Pacific islands, Miami and Southern China, but also dilute the salt content of the sea. This will make movement sluggish, causing us to lose the warming North Atlantic Drift in winter, making the coldest season colder’. Lastly, the Met is not ruling out additional surprises: rainforests currently absorb huge amounts of carbon dioxide; if they become dry forests then they will release that gas back into the atmosphere. Green Funds offer a chance to change the weather for the better.

The following table shows the rate of increases that have applied during the last ten years.

FUND ACCOUNT