Latest news with #DefinedContribution
Khaleej Times
27-07-2025
- Business
- Khaleej Times
Complex but critical: The GCC's shift to defined contribution plans
As the employment landscape across the Gulf Cooperation Council (GCC) grows and matures, it's imperative that the retirement systems which supports workers across the region grow too. It's increasingly clear that the traditional end-of-service gratuity (EOSG) model that has long underpinned retirement benefits in GCC countries must adapt as the region seeks to position itself as a magnet for global talent and investment. That means embracing Defined Contribution (DC) plans that align with international best practices and the expectations of a globally mobile workforce. The push for reform is gaining momentum. A 2024 survey by Smart found that 60 per cent of expatriates in the UAE, Saudi Arabia, and Qatar feel current EOSG payments fall short of meeting their retirement needs as it can be challenging for financial planning due to a lack of transparency. This sentiment underscores the importance of reforms to maintain the region's attractiveness to international talent – many of whom will have come from regions where DC models are widely available, if not the norm. Encouragingly, reforms are underway. In the UAE, the Dubai International Financial Centre's DEWS plan has already replaced EOSG with a regulated, employer-funded DC scheme. Not only this, but in late 2023, the UAE's Cabinet introduced a voluntary pension savings programme, allowing employers in the private sector and free zones to contribute a monthly percentage of salaries to licensed investment funds. These contributions are protected from employer insolvency and designed to outpace inflation. In the UAE at least, these early signs show us that clear transition is underway – and is likely to soon become much more widespread. Indeed, the situation is similar in other Gulf countries. Bahrain now requires monthly employer contributions to be managed by its Social Insurance Organisation. Oman's Social Protection Law signals a future move to a savings-based system. Saudi Arabia still largely operates under the traditional model, but leading companies are developing their own corporate savings schemes to stay ahead of the curve. Qatar, too, is likely to prioritise funded alternatives as it expands its retirement coverage beyond local nationals. A tipping point is likely to come when a sufficient number of products are in market. As more financial institutions increase their capabilities in the region, it's likely that would fundamentally shift how retirement is funded across the GCC and governments may mandate participation. We've seen this upscaling of firms' activity and resources in the Gulf region – including for our own operations. However, this transformation won't be without challenges. Regulatory harmonisation across GCC countries is complex, with each jurisdiction operating under different labour laws. Yet we know that consistency – across products, regulatory standards, etc. – is key to ensuring savers are empowered to arrive at the best outcomes. To realise this, we'll need to see legal reforms and cross-sector collaboration, factors which can ultimately lay the groundwork for consistent, transparent DC frameworks. For employers, a DC system brings new responsibilities — notably, regular contributions and administration oversight. But the long-term benefits, including improved talent retention and workforce satisfaction, outweigh the costs. And governments can support the transition by offering flexible contribution structures and incentives. Ultimately, the transition to DC systems is not just a financial reform; it's a social one. It's about ensuring that the region's workers — who have helped build the Gulf's economic success — can look to the future with confidence. The Gulf region needs to move towards a retirement system that's modern, relevant, and worthy of its global ambitions, supported by an expanding, sophisticated financial services industry across regional hubs. The writer is head of investment strategy and research, MEA, State Street Investment Management.
Daily Mirror
16-07-2025
- Business
- Daily Mirror
Rachel Reeves speech - how finance system changes affect you from mortgages to shares
In a key speech to City bosses, Chancellor Rachel Reeves said financial advice is 'tangled' for puzzled Brits as she outlined plans to make investing in stocks and shares easier Rachel Reeves has issued a rallying cry to the financial sector - saying it must change "negative" perceptions about investing in stocks and shares. In a key speech in central London, the Chancellor also vowed to cut away red tape she branded a "boot on the neck of businesses". She also said new changes will boost people getting their first mortgage as she declared "Britain is open for business". There will be good news on pensions, Ms Reeves said. She warned that the global economy is increasingly uncertain, but vowed: "The job of a responsible government is not simply to watch this change - We must step up, not step back." Speaking to City chiefs, Ms Reeves said: "For too long, we have presented investment in too negative a light, quick to warn people of the risks without giving proper weight to the benefits." She also said that the "tangled system" of financial advice available to the public needs to be tackled. Here we look at some of the key things that came out of Ms Reeves' speech. Stocks and shares Mr Reeves promised a shake-up to make investing in stocks and shares more accessible. She branded financial advice a "tangled system" and said people aren't sold the benefits. The Chancellor said: "For too long, we have presented investment in too negative a light quick to warn people of the risks, without giving proper weight to the benefits. And our tangled system of financial advice and guidance has meant that people cannot get the right support to make decisions for themselves." She continued: "That is why we are working with the FCA (the Financial Conduct Authority) to introduce a brand-new type of targeted support for consumers ahead of the new financial year." Pensions The Chancellor lauded new legislation coming into law in the coming months to boost the pension sector. She told the audience: "Last year at Mansion House, I set out an overhaul of our pensions system and the Pension Schemes Bill, led by my colleague the Pensions Minister, will be signed into law in the next few months. "The creation of Defined Contribution and Local Government Pension Scheme megafunds will mean larger and more powerful pots of funding invested productively across the country." And Ms Reeves continued: "We have a duty to maximise the potential of people's pension savings and our Bill reserves the power to mandate pension funds to invest productively in a wider range of assets sending a clear signal that pension funds and this government are united in our determination to deliver higher returns for savers and more investment for the economy. "But I am confident that I will not need to use that power because firms see the urgency and importance of this as clearly as I do." Mortgages Ms Reeves said new changes will mean tens of thousands of people will be able to get a mortgage in the 12 months who wouldn't have been able to previously. The Chancellor singled out Nationwide's Helping Hand scheme and said she welcomes new lending rules will make a huge difference. She said: "I welcome the recent changes the Financial Policy Committee has announced to the loan-to-income limit on mortgage lending which the PRA and FCA are implementing immediately. "That means tens of thousands more people buying their first home will be able to get a mortgage over the next year with Nationwide already offering its 'Helping Hand' mortgage to more first time-buyers supporting an additional 10,000 each year." And my thanks to Dame Debbie Crosbie for her leadership. Global uncertainty The Chancellor said that the global economy is becoming more uncertain - meaning ministers must be on her toes. She told City bosses that the importance of economic security had been "brought into sharp focus" in recent months. Ms Reeves said: "As the world changes before our eyes, and the global economy becomes more uncertain. "The job of a responsible government is not simply to watch this change - we must step up, not step back." And she said success must not be "limited to a handful of sectors, a few people, or only certain parts of the country". Work so far is getting results Ms Reeves said that steps taken since Labour came to power are making a difference. She pointed to cuts in interest rates, as well as reductions to the cost of mortgages and lending and wage growth. The Chancellor said: "The stability that we have restored is already delivering: "Four cuts in interest rates by the Bank of England since the General Election, reducing the cost of mortgages and business lending; Real wages up by more in the first ten months of this government than in the first ten years of the previous government; And investment is returning to our economy. "At the Spending Review, I set out £120bn of additional public investment over the next five years and last month, the Prime Minister confirmed that the UK has attracted £120bn of private investment – in just the last 12 months." Cutting back red tape The Chancellor told the audience that red tape is stifling businesses, and vowed to do more to cut back on red tape. She described regulation as a "boot on the neck of businesses". Ms Reeves stated: "As I look ahead it is clear that we must do more. In too many areas, regulation still acts as a boot on the neck of businesses choking off the enterprise and innovation that is the lifeblood of growth. "Regulators in other sectors must take up the call I make this evening not to bend to the temptation of excessive caution but to boldly regulate for growth in the service of prosperity across our country."
Business Recorder
18-06-2025
- Business
- Business Recorder
Govt well prepared to tackle any fallout: Aurangzeb
ISLAMABAD: Finance Minister Muhammad Aurangzeb said Tuesday that the government will ensure adequate stockpiles of petroleum products in the country keeping in view geopolitical tensions and regional developments in Middle East. Senator Muhammad Aurangzeb participated as the Chief Guest at the 'National Workshop on Transitioning to Defined Contribution Pension Schemes', organised by the Securities and Exchange Commission of Pakistan (SECP) at a local hotel on Tuesday. Finance Minister assured that Pakistan was well-prepared to navigate any potential fallout from regional instability. In his keynote address, the Minister began by briefing the participants on the recent geopolitical tensions and regional developments, sharing insights from a high-level meeting he chaired yesterday to review the evolving situation and its potential economic implications for Pakistan. He noted that in-depth discussions were held with key stakeholders on scenario planning, ensuring adequate stockpiles of petroleum products, and monitoring asset class pricing. He emphasised the government's firm resolve and preparedness to handle any eventuality, stating, 'We are in a good place — but hope is not a strategy. We have to plan for every possible outcome.' Touching upon international economic developments, Senator Aurangzeb shared details of his constructive and positive conversation with the US Commerce Secretary held late last night. He described the ongoing discussions on US tariffs as encouraging and noted that both countries are making steady progress and the broader objective is to deepen bilateral relations into a strategic economic partnership. Highlighting the government's reform agenda as laid out in the recently announced federal budget, the Minister reaffirmed the government's commitment to macroeconomic reforms. He emphasised that the government would continue to push forward on key areas such as privatization, tax reform, state-owned enterprise (SOE) restructuring, federal government rightsizing, pension, and public finance reform. Speaking on the subject of pension reforms, Senator Aurangzeb explained the rationale behind the government's decision to transition new civil servants to a Defined Contribution (DC) pension scheme, effective July 1, 2024. He underscored that this shift was a critical step taken even before addressing the legacy issue of unfunded pension liabilities. 'We had to stop the bleeding,' he said, referencing the fiscal burden of pension payments which have now exceeded one trillion rupees— surpassing the federal government's entire development budget. 'This raises a fundamental question of macroeconomic sustainability,' he added, stressing the urgency of reform. The Minister also commended provincial governments for their proactive role, particularly in the area of public-private partnerships and for taking the lead on defined contribution initiatives. He noted that the theme of the workshop—transitioning to defined contribution schemes—was both timely and significant, likening it to ongoing tariff reforms in its structural importance. Concluding his remarks, Senator Aurangzeb expressed confidence in the collective ability of stakeholders to bring about meaningful change in Pakistan's pension landscape, driven by sustainability, transparency, and long-term fiscal responsibility. Finance Minister underscored the urgent need for pension reform, noting the unsustainability of the current defined benefit system. In his address, Akif Saeed, Chairman SECP, outlined the progress made in developing a robust regulatory framework for DC pension schemes. He emphasised the critical role of technology, transparency, and awareness-building in shaping a modern and inclusive pension landscape. Federal and provincial government representatives shared updates on reform progress, with Khyber Pakhtunkhwa presenting valuable insights from its early implementation experience. The workshop served as a platform for dialogue among senior officials, regulators, financial sector leaders, and development partners. The SECP reaffirmed its commitment to working closely with all stakeholders to develop a transparent, reliable, and future-ready pension system that supports long-term financial security and inclusion. Copyright Business Recorder, 2025
Yahoo
11-06-2025
- Business
- Yahoo
Brooks Macdonald offers retirement strategies to meet rising demand
Investment management firm Brooks Macdonald has launched a suite of retirement investment solutions designed to help financial advisers meet the increasingly complex needs of clients preparing for or living through retirement. The new Retirement Strategies offering is built around the rising demand for hybrid products that blend sustainable income with long-term growth, while allowing for individualised needs and varying levels of financial complexity. The firm's new approach introduces three distinct solutions: Bespoke, Tailored, and Modelled, aimed at delivering flexibility and transparency in an area often marked by confusion and risk. Andrea Montague, CEO of Brooks Macdonald stated: 'We are delighted to launch Brooks Macdonald Retirement Strategies for our valued IFAs and their clients who want retirement investment options not met by products currently available in the market. We have listened carefully to clients' needs and have developed a product which aims to provide financial peace of mind in retirement." The Bespoke strategy is a personalised solution designed for clients with more complex financial needs, such as fluctuating income requirements or specific portfolio growth preferences. Moreover, the Tailored option offers a cost-effective solution for clients with simpler needs, delivered through a single account at a lower management fee. Meanwhile, the Modelled strategy targets scalability and efficiency, allowing advisers to select from various platforms and withdrawal rates that best suit a client's risk profile and income expectations. One of the key challenges addressed by the new strategies is the management of sequencing risk, the danger that poorly timed withdrawals can harm long-term investment outcomes. Brooks Macdonald aims to mitigate this risk by allocating investments into three time-based "buckets": 0–1 Year: Cash reserves for immediate income needs 1–7 Years: Fixed maturity investments for medium-term income 7+ Years: Diversified portfolios targeting long-term capital growth This structure allows for a more stable income stream while maintaining long-term growth potential, offering a clear and methodical approach to drawdown planning. The firm believes this model will resonate with advisers and clients alike, particularly as the UK faces a rapidly ageing population and a growing interest in flexible retirement options. According to industry forecasts, the number of income drawdown plans is expected to rise by 20% over the next five years, with more than half of Defined Contribution pension holders showing strong interest in solutions that mix short-term income with long-term investing. Neil Cowell, Group Distribution Director at Brooks Macdonald added: 'Planning for retirement brings growing complexity, from the changing regulatory environment to the management of multiple pension pots and inheritance tax considerations. A quarter of the UK population is set to be over sixty-five within the next fifteen years, and the need for flexible retirement planning has never been greater. These are the reasons why the 91% of people in the UK who currently don't take financial advice2, should speak to an expert.' Brooks Macdonald's Retirement Strategies will now be available to financial advisers across the UK. "Brooks Macdonald offers retirement strategies to meet rising demand" was originally created and published by Private Banker International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Qatar Tribune
26-05-2025
- Business
- Qatar Tribune
Qatar, London eye deeper investment relations as lord mayor visits Doha
Tribune News Network Doha The Qatari Businessmen Association (QBA) hosted Lord Alastair King, Lord Mayor of the City of London, and his accompanying delegation for a luncheon held on the sidelines of his visit to Doha. The event was attended by His Excellency Neerav Patel, the British Ambassador to the State of Qatar, and was welcomed by Sheikh Faisal bin Qassim Al Thani, QBA Chairman. Also the luncheon was attended by Sheikh Nawaf Nasser bin Khaled Al Thani, QBA Board member, along with QBA members: Khalid Al Mannai, Sheikh Mansour bin Jassim Al Thani, Nabil Abu Issa, Youssef Jassim Al Darwish, Sheikh Turki bin Faisal, Faisal Al Mana, Abdulrahman Al Darwish, Youssef Al Mahmoud, Mohammed Althaf, and Sarah Abdallah, QBA Deputy General Manager. Lord Alastair King praised the visit of His Highness Sheikh Tamim bin Hamad Al Thani, the Amir of the State of Qatar, to the United Kingdom last December, describing it as a celebration of the strong commercial, financial, and cultural ties between the two nations. Lord King emphasized that the United Kingdom views Qatar as a key investment partner and expressed gratitude for Qatar's trust, as demonstrated through its substantial investments across various British institutions and businesses. He noted that these investments extend beyond London to several parts of the UK, including South East England, where numerous investment opportunities are available. During the meeting, Lord King discussed a new joint initiative — the Mansion House Accord — launched by the Pensions and Lifetime Savings Association (PLSA), the Association of British Insurers (ABI), and the City of London Corporation. The initiative involves commitment by 17 pension schemes and providers to allocate at least 10% of default Defined Contribution (DC) funds to private markets, with no less than half of these investments directed toward UK assets by 2030. According to the UK Treasury, the agreement is expected to mobilize over £50 billion in the next five years, including £25 billion for UK-based investments. He also highlighted efforts to encourage UK businesses to explore and expand into new markets like Qatar, stressing Britain's expertise in sustainable finance and project financing. He expressed interest in engaging Qatari investors in some of the UK's cutting-edge technological sectors. He added, 'London and Doha share a very close relationship. Several Qatari banks and institutions operate actively in London, engaging in significant business activities. It's equally promising to see British banks well represented in Qatar, while Qatari capital is also being invested in other British financial institutions, some of which are present in Qatar and attracting British investments.' He also touched on the UK's trade relations with the Gulf Cooperation Council (GCC), stating that projections suggest bilateral trade will grow by 16%, reaching nearly £57 billion. He emphasized the exceptional opportunities that exist between the UK and Qatar. 'There are many investments coming from Qatar related to green finance — an area where the UK considers itself a market leader,' he said. 'We currently manage £91 billion in green investment funds, and Qatar is participating in these funds.' Lord Alastair King invited members of the Qatari Businessmen Association to visit London to explore a wide range of investment opportunities across various sectors, assuring them that he would facilitate all investment-related processes for the Qatari business community within the City of London. For his part, Sheikh Faisal bin Qassim Al Thani, Chairman of the Qatari Businessmen Association, described London as a preferred investment destination for Qatari businessmen. He emphasized the historic and exceptional bilateral relationship between Doha and London, which has seen significant growth in economic and commercial ties in recent years. He confirmed that QBA members have diversified investments in the UK across sectors such as tourism, retail, construction, education, healthcare, and other productive industries. Neerav Patel, praised the strong and fruitful relationship between the UK Embassy and the QBA. He emphasized the UK's commitment to enhancing bilateral cooperation across all sectors, which he described as having reached their highest levels.
