PENSIONS AND PENSION PLANNING

SHE Level 3
SCQF Credit Points 20.00
ECTS Credit Points 10.00
Module Code M3N326558
Module Leader Patrick Ring
School Glasgow School for Business and Society
Subject Risk
Trimester
  • B (January start)

Pre-Requisite Knowledge

Succesful completion of Personal Investment or equivalent.

Summary of Content

In this module students address pension policy and pension reform in the UK, as well as looking at pensions law and tax issues in the content of pension planning for retirement. They examine the role of Government, employers and individuals in saving for retirement in the context of economic and demographic change. Considering the risks inherent in pension provision, students also examine in detail the nature of both defined benefit and defined contribution provision, as well as hybrid approaches, within the framework of membership, funding, governance, ethics, disclosure and administration. This also includes an examination of both trust- and contract-based arrangements and their legal and practical implications. With this foundation, students then examine individual pension planning, looking at HMRC's tax regime as it applies to pension planning. They examine the legal and tax provisions relating to pension contributions, investments and drawing pension benefits across the range of different pension arrangements - both state and private. Students also consider the implications of these requirements for enabling individuals to meet their pension planning objectives

Syllabus

-360b7 Economic, demographic and socio-political of challenges facing UK Pension provision b7 The development and current structure of state and private pension provision in the UK b7 Risk and pensions, the shift from DB to DC, and the influence of behavioural economics b7 Auto-enrolment and defined ambition schemes b7 Defined benefit schemes - structure, funding, benefits, governance and administration b7 Defined contribution schemes (group and individual) - structure, funding, benefits, governance and administration b7 Pension fund investment, principles for responsible investment, ESG approach to investment b7 The regulatory bodies responsible for pensions b7 Pension scheme accounting and actuarial issues relating to pension schemes b7 Pension planning for individuals: b7 Legal and HMRC requirements concerning contributions and benefits, limits and allowances, including calculations b7 Analysing options and relevant factors in deciding when and how to take pension benefits at retirement b7 Analysing options and relevant factors in deciding how to deal with preserved benefits and pension transfers, as well as ill-health and death benefits b7 Assessing the retirement needs of individuals - planning, investments, risks and outcomes

Learning Outcomes

On successful completion of this module, the student should be able to:1. Critically discuss and assess the background and development of pension policy in the UK in the context of economic and demographic change2. Analyse the main types of Defined Benefit and Defined Contribution provision, as well as hybrid arrangements, and discuss the key legal and compliance requirements, as well as policy debates, concerning their creation, structure and funding, as well as the legal and tax, governance and ethical rules relating to their investments, governance and administration3. Explain and assess the structure of state retirement benefits in the UK, including the relevance of contracting out, and the structure and provisions of public sector pension schemes4. Explain and analyse the role of the various regulatory bodies with responsibility for pension provision in the UK, discussing the ethical and governance issues with which regulators are concernedIn relation to individual pension planning:5. Explain and apply the pensions regulatory and tax regime to individual pension planning, including the rules and requirements concerning contributions and investments and benefits6. Calculate pension benefits and limits in various circumstances, and explain and analyse the options available to individuals when taking benefits at retirement7. Explain and assess the application and relevance of state benefits8. Discuss individual savers' aims and objectives and the array of pension arrangements and investment (pension and non-pension) opportunities available to meet those objectives9. Apply their knowledge of UK pension provision to solve problems and provide practical solutions in a variety of situations10. Exploit social media as a research tool

Teaching / Learning Strategy

Using lectures and downloadable podcasts as a framework, students will require to gather, analyse and interpret a range of material from various sources, including current theoretical research as well as up-to-date industry analysis. Seminars provide the opportunity to supplement the core material by analysing and discussing particular issues. Students will be encouraged to formulate arguments as well as provide evidence-based solutions to practical case studies. GCU Learn will be used to provide regular formative assessment exercises. A Discussion Board and Blog will also be used to highlight and discuss up-to-date pension issues arising in the course of the module. A practical dimension will be added through analysis of actual pension schemes, calculations and case study scenarios and presentations by guest speakers from the pensions industry. The written assessment will use the Twitter social network as means of expanding students' range of research resources, and will test students' analysis skills, as well as their ability to find and apply solutions to practical problems. This will be underpinned by a final exam. Students will be provided with a template for the evaluation of their coursework, and asked to identify both the strengths and weaknesses of their own work, including assessing their own written work. They will be asked to consider their work in relation to clear guidance provided on the coursework's requirements and given time to discuss and reflect upon those criteria in class prior to submission. Forward feedback will also be given by analysis of anonymised previous courseworks and exam scripts Feedback will be provided soon after submission and identify strengths, weaknesses and corrective advice. It will identify generic and individual action points and, by setting specific time aside, students will be encouraged to identify choosing own action points to close the gap between current and desired performance. GSBS will continue to use the advancement of GCU Learn as a blended learning tool through its teaching and learning as well as through engagement with students. GSBS will ensure that all modules are GCU Learn enabled and with the support of the Learning Technologists at the cutting edge of development of online materials. Academic staff and the Learning Technologists will continue to work together to develop and operate all modules on GCULearn to ensure student support and information sharing. Students are provided with formative and summative feedback via a variety of mechanisms. Feedback on coursework is provided within 3 working weeks of submission.

Indicative Reading

-567 CORE TEXT -360b7 The Guide for Pension Trustees, (Electronic resource) GCU Online Holdings -360b7 Pensions and Retirement Planning: London, CII. Study Text R04 -567 Other Texts -360b7 Barr, N., Diamond, P.(2009) Pension Reform: A Short Guide, OUP -360b7 Blake, D.H. (2003) Pension schemes and pension funds in the United Kingdom: Oxford University Press (ISBN 0199243530) b7 Clark, G. Munnell, A. and Orszag, J. (eds) (2006) The Oxford Handbook of Pensions and Retirement Income, Oxford, OUP b7 Clark G., Strauss, K. and Knox-Hayes, J. (2011) Saving for Retirement: Intention, Context, and Behavior, Oxford, OUP b7 DWP (2006) Security in retirement: towards a new pension system, Norwich, The Stationery Office -360b7 DWP (2007) Personal accounts: a new way to save, Cm7121, Norwich, TSO -360b7 DWP (2008) Risk sharing consultation, 5 th June 2008, London, Department for Work and Pensions b7 Ellison, R. (2006) The Pension Trustee's Handbook: The Definitive Guide to the Trustee's Role and Obligations (5 th Ed), Thorogood -360b7 Ellison, R. and Jolly, A.(2007) The Pension Trustee's Investment Guide, London, Thorogood -360-666b7 HM Treasury (2008) Updating the Myners principles: a response to consultation, October 2008, Norwich, HMSO -360b7 Jupp, B (1998) Reasonable force: The place of compulsion in securing adequate pensions, London, Demos -360b7 Lusardi, A (ed) (2008) Overcoming the Saving Slump: How to Increase the Effectiveness of Financial Education and Saving Programs, Chicago, University of Chicago Press b7 Marshall, J., McKenna, C. and Graham, E. (2005) Pensions Act 2004: A Guide to the New Law, London, The Law Society -360b7 Mitchell, O. and Smetters, K. (eds.) 2003 The Pension Challenge: Risk Transfers and Retirement Income Security, OUP -360b7 Mitchell, O. and Utkus, S. (eds.), Pension Design and Structure: New Lessons From Behavioural Finance. Oxford: Oxford University Press b7 Pensions Policy Institute (2012) The Pensions Primer, London, PPI b7 Thaler, R. And Sunstein, C. (2008) Nudge: Improving Decisions About Health, Wealth, and Happiness, Yale University Press Web Resources Association of British Insurers <http://www.abi.org.uk/> Association of Consulting Actuaries <http://www.aca.org.uk/> The Department of Work and Pensions <http://www.dwp.gov.uk/> National Association of Pension Funds <http://www.napf.co.uk/> Pension Trends - The Office for National Statistics <http://www.ons.gov.uk/ons/about-ons/our-statistics/publications/pension-trends/index.html> The Pensions Commission <http://www.pensionscommission.org.uk/> The Pensions Policy Institute <http://www.pensionspolicyinstitute.org.uk/> The Pension Protection Fund <http://www.pensionprotectionfund.org.uk/> The Pension Regulator <http://www.thepensionsregulator.gov.uk/> The Trades Union Congress <http://www.tuc.org.uk/> Watson Wyatt Europe on the Pensions Act 2004: <http://www.watsonwyatt.com/europe/services/integrated/pension_framework/>

Transferrable Skills

By the end of this module, students will have had the opportunity to develop their written and oral communication skills in seminars and written assessments. Their independent learning will be encouraged through their use of podcasts and online formative assessments to deepen and enhance their learning, and group work will be enhanced in exercises undertaken in seminars. The assessments will enhance their research skill and awareness of the potential of Web 2.0 resources as an information source, as well as developing their analytical and problem solving skills. The assessments will also enable students to exercise autonomy and initiative in a subject and sector-specific context. Through the coursework and exam assessments they will also be required to show an ability to manage ethical and professional issues in accordance with current practice.

Module Structure

Activity Total Hours
Lectures (FT) 22.00
Seminars (FT) 22.00
Assessment (FT) 18.00
Independent Learning (FT) 138.00

Assessment Methods

Component Duration Weighting Threshold Description
Course Work 01 n/a 50.00 35% Scenario Based Problem 2000 words
Exam 01 3.00 50.00 35% 3 hour exam