A Guide to Defined Benefit And The Recent Changes

Defined benefit pension plans are the traditional pension schemes often referred to as the gold standard of pensions. In a defined benefit pension scheme, the employer offers the retired employee a monthly sum based on their earnings, age and how long they worked for the company. They became popular after the Second World War, particularly at large corporations and companies such as the BBC, Vauxhall and British Telecom. The benefits paid by the employer are linked to the employee’s salary. As their salary rises, so does the amount they receive on retirement. The employer is responsible for making sure that there are sufficient funds to pay the pension after the retirement of the employee.

Such pension schemes are defined because their benefits are known in advance. In most cases, they are based on the employee’s final salary, which means that the pension benefits are calculated using the employee’s average salary over a number of years at the end of their career.

If you have been paying into a defined benefit contribution pension scheme, your savings plus the contributions from your employer and any government tax relief you have acquired will have been invested in the stock market. However, the income you receive is guaranteed and agreed in advance. Therefore the pension is not dependent on how well the stock market or other investments perform. A defined benefits pension will also rise in line with inflation each year.

Today, defined benefit pension schemes are usually occupational pensions. Final salary schemes are becoming rare. Many are now closed to new members, with more pension plans turning to the less generous career average schemes. These are based on the average of the employee’s earnings during their career and usually result in a smaller monthly pension payment than the final salary schemes.

From next April, people in defined benefits pension schemes, particularly final salary pension plans, will be able to transfer to defined contribution schemes if they wish to. These differ to defined benefit pension plans in that members can choose the fund in which their pension savings will be invested. Members are also able to increase the amount they contribute monthly, which is not possible with a defined benefits scheme. At retirement, members have to use the money that has been accrued through their plan to buy an annuity. They are also able to withdraw as much as 25 per cent as a tax-free lump sum. From April 2015, members of defined contribution schemes will be able to withdraw some or all of their pension funds and invest them or spend them as they wish, although they will have to pay tax on 75 per cent of the sum.

All pension schemes are dependent upon the vagaries of the stock market. Consequently, since the economic crisis of 2008, most final salary schemes have been in deficit. However, the difference between assets and liabilities is narrowing. The future remains uncertain for these schemes, and they are likely to be subject to regulation changes and to government intervention over the coming years.

Because so many pension schemes depend upon the stock market, there is an obvious element of risk involved. Those managing pension schemes have struggled to cope with deficits. Further government intervention is always a potential threat too. Fortunately, there is a range of tools available that will help schemes to manage risk and so become more stable. Many schemes, however, are finding that the task of attaining stability is too difficult to manage on their own. Aon Hewitt offers a guide to managing the various and often competing demands of companies, trustees and pension members.

The future is looking for brighter for pensions than it has done for some time. As the economy revives, there are increased opportunities for pension scheme investment as well as more opportunities for plans to insure against members’ greater life expectancies.

Why Choose A Financial MSc Degree?

By adding an MSc in accountancy and finance to your CV your are not only opening up a route into a whole range of financial professions but doors will open that lead to a career in a host of other sectors which include advertising, journalism, law, sales, IT and marketing. The MSc in accounting and finance courses that are currently available are the step you need to take to reach the highest levels in these areas and is also the stepping stone you need to have in place to achieve a PhD.

A career in finance beckons

These courses focus on the needs of the global financial markets today and will help you on your way to building a career as an analyst, financial management or accountant.  Those studying for their master’s degree in accounting and financing will find they are in an environment which is structured to provide students with the disciplines that are required to strengthen both skills and knowledge. This is a great starting point for those who want to pursue further academic or professional challenges in the future.

Practical Courses

While we would never dispute how important theory is, the best MSc Accountancy and Finance degrees have a very pragmatic approach and focus on those real life scenarios that you are going to come across during the course of your career.  Taking your degree at an institution such as the Greenwich School of Management will allow you to not only attend tutorial and lectures but also take part in group work and case studies that will let you apply your own theoretical concepts to those problems you will face in the real world.

How long will it take me to get degree?

You generally have two alternatives depending on where you study; a one year full time course or two years part time. Which one you decide very much depends on how quickly you feel you need your degree and your personal circumstances. Some find the flexibility of part time study a god-send when they have to fit it in around work, while others prefer to dedicate a year of their life to gaining their MSc in Accountancy and Finance. Whichever you prefer it’s definitely worth while.

YUKOS Shareholders Will Receive 1.9 Billion Euros from Russian Government

Just days after the Hague awarded a 50 billion dollar payout to some of YUKOS shareholders, the EHCR (European Court of Human Rights) has decreed that the Russian government pay out an additional 1.9 billion euros to the company’s shareholders.  This decision came as a result of the EHCR finding that Russia failed to “strike a fair balance” when it forced YUKOS to pay exorbitant penalties.

YUKOS former director, Mikhail Khodorkovsky, released a statement via his spokeswoman stating that the ruling was “an unprecedented decision.”  He went on to say that, as the court had never awarded such a large sum in its history, the news of the decision was received with great joy.  On top of the 1.9 billion awarded, the EHCR also found that Russia was liable for an additional 300,000 euros for expenses and court costs.

Before YUKOS was broken up and nationalized over 10 years ago, the company had been worth around 40 billion dollars.  Upon the company’s dissolution, its assets were given to Rosneft, an energy conglomerate that is run by a friend of Russian President Vladimir Putin.  To further cast a suspicious light on the Russian government’s actions, when YUKOS was dissolved, Mikhail Khodorkovsky was arrested at gunpoint.  Two years later he was convicted for tax evasion and theft.  Khodorkovsky was recently released from prison, having served a 10 year prison sentence.

In court, YUKOS made the claim that the Russian government had unlawfully seized its assets by imposing false taxes and liquidating the company’s assets in a fraudulent auction that had the ulterior motive of directly benefiting this political ally of President Putin.

Three years ago, in an interim ruling by the ECHR, the court found that although Russia had not failed to use the proper legal proceedings in the process, it had used excessive enforcement proceedings when targeting YUKOS.  This finding resulted in an invitation to YUKOS to submit a claim for compensation, otherwise known as “just satisfaction.”

Basing the figures on expert valuations, YUKOS claim for compensation came to just under 38 billion euros, naming all of the 55,000 YUKOS shareholders as potential recipients, some of whom are funds representing groups.  On top of that they asked for $174,000 to cover the expert report fees, 4.3 billion pounds for their extensive legal costs, and an additional $588,148 in miscellaneous fees and expenses.

Leonid Nevzlin, one of YUKOS’ top shareholders and a former executive of the company, appeared on a radio show soon after the decision was announced.  In reference to the announcement of the ruling, he was quoted as saying that it was “another confirmation of the fact that everything Russia did against the oil company was illegal.”

While YUKOS is celebrating the decision, Russia’s Justice Ministry has gone on record stating that the court’s decision was a biased decision and, subsequently, an unfair ruling.  The ministry went on to say that it is prepared to appeal the ECHR’s ruling within three months.

Credit History and Other Vital Factors Which Influence the Auto Insurance Rates

Auto insurance is designed to protect you from losses which may occur when you drive a motor vehicle. There are several coverages which are offered for automobile insurance. You must make sure that you opt for the best coverage. Auto insurance is important as it is required by law and is an important form of investment for car owners. Once you have auto insurance, you would be complying with the law. As you drive around in your motor vehicle, you will not be penalized. You will enjoy peace of mind as you have financial back-up for your car.

Importance of auto insurance

Accidents are inevitable. Meeting expenses upfront is difficult if your car meets with an accident. With auto insurance claim which backs you up the impact will be lesser. It will be easier for you to handle the sudden expenses. To lower the auto insurance savings you can install safety devices in your vehicle. Once you install the safety devices you can minimize the damage which accidents cause. Make sure that you choose modest cars. If you opt for an expensive car, the auto insurance premiums which you need to pay will be higher. If you have a good driving record, you will not have to pay much for the insurance premiums.

Check the credit history

Auto insurance will look at your credit score to decide on how much coverage you will have to pay. The credit score which is used by insurance companies differs from that which is used by banks. The insurance companies make use ofcredit score which is significant to their industry. Although credit score is a lesser known factor which can influence your car insurance rate, it is important that you are informed about the same. Whether you are an experienced driver or a novice at the wheels, it is important that you watch your credit history.

Credit score and driving history

Car insurance companies use the credit score to calculate the cost of the car insurance. At times, insurance agencies make use of credit scores to ascertain the policyholder’s likelihood of getting involved in an accident. It has been seen that policyholders with better credit scores have to pay lower insurance premiums. The car insurance rates will depend on your driving record as well. Driving history plays an important role in determining the insurance rates. In most of the states, accidents and parking violations can result in skyrocketing car insurance rates.

Important factors

Auto insurance rates depend on some other factors which include gender, age and marital status. If you are a novice and new on the road it is assumed that you will be at higher risk than the other drivers. Highest premiums have to be paid by unmarried men. The auto insurance premiums also depend on the make and model of your car. To an extent it depends on the average mileage per year and the anti-theft devices which you have installed in your car. You may not have control over all the factors, but you can keep a check on the insurance premiums by keeping a check on the credit history.

Renewing policy on time

If you have bought a new and more expensive car keep in mind that you may have to pay a higher premium. By choosing a more economical vehicle, you can cut down on the car insurance rates. Make sure that you check with the auto insurance provider so that you can renew your policy on time. The distance you have travelled and an improvement in your credit score may influence the insurance premiums which you pay.

Common Mistakes People Make When Filing Their Own Taxes

A tax firm is a company that assists individuals or business owners with tax filings and tax problems. These companies offer the expertise of an accountant whom can provide this assistance by filing income taxes, reviewingthe owed taxes, advising on how anything owed can be repaid and teaching techniques on how to avoid tax penalties. Most of these firms employ tax professionals or tax attorneys, accountants, former CRA agents or even enrolled agents. The purpose of the tax firm is to help conquer tax problems and fix them, and not to create more financial burden for the client. When it comes to tax filing difficulties, there a few common mistakes these tax firms see regularly.

You can recover and regain missed tax refunds by completing an adjustment to prior returns up to ten years back. Remember that it is also possible to fix errors from prior years. Report all income as soon as possible and always avoid the underground economy. If you work in the retail, hotel, restaurant, or construction industry, the CRA is more likely to ask to see your books because it has been statistically shown that individuals in these professions are more likely to be involved in the underground economy. If the CRA requests to verify any filings, you must comply and it is always best to have accurate and legal documents to show them all deduction claims and prove all income earned.

Another tax trap that people often fall into involves flipping homes. If you buy a home for your primary residence and choose to sell it the following year, the capital gain is tax free. However, if you choose to make a career out of flipping houses, you could now be facing a tax problem. If the CRA sees that you are buying and selling too often, they will consider any profit to be income, which will now be required to be reported at tax time. If you are unsure if you will have to report housing sale profits, the best course of action is to make an appointment with a tax firm for guidance on how to proceed.

Many people miss claiming their safety deposit box as part of their income. Of course it isn’t the most efficient, but it is still money andit’sa highly missed tax deduction. It would be wise for investors to review all statement summaries from their financial institutions to re-ensure interest costs and brokerage fees are included. When it comes to tax time, do not wait or hesitate to find tax preparation help in Canada, such as the expert team at Tax911 Now!They are experts in their field and have in-depth knowledge of the tax system and how it works. They really are the best resource you will find when you encounter tax questions or problems.

3 Tips on Business Asset Liquidation

The liquidation of a company is the legal winding up of a company that includes the sale of company assets to facilitate the payment of remaining debts to the company’s creditors and the dispersal of any remaining assets to the company’s shareholders.  While there are a variety of reasons of why a company may go through liquidation, the action of liquidating a company is used whenever a company is wound up except when it is the result of an amalgamation or merger.

The most common reason a company is liquidated is because it has become, or is very close to becoming, insolvent.  Essentially, insolvency is the state a company ends up in when it is unable to cover its debts and pay back its creditors.  Insolvency can result from a variety of factors and does not necessarily lead to a company going through liquidation.  Depending on the circumstances of the insolvency, there are some steps a company can take to stay in business and remain a legal entity.  One such step is called a company voluntary arrangement, or CVA.  A CVA is an agreement made between an insolvent company and its creditors that allows the company to remain in business and pay off their debts in a way that will not hinder their operations. A CVA is almost exclusively reserved for companies that have become insolvent as a result of a one-time problem.  Even then, the creditors of a company that has not already recovered from their financial issues will rarely agree to a CVA.

If your business is considering liquidation or is at risk of a court ordered liquidation, there are a variety of steps you can take to ensure that things go smoothly.  The best result to work towards in a liquidation is to have your creditors paid off in full and to have your shareholders take home a sizeable portion of their investment in the company.  Depending on how the liquidation of assets is managed, there can be a sizeable difference in the ready cash available for dispersal to applicable parties.  Here are some steps that can be taken to try to maximize on the value of your company’s assets.

1. Hire a professional liquidator. Assuming that your company’s assets are large enough to be worth the fees of a liquidation expert, having an expert on hand to sell of company assets will make a tremendous difference in the funds available for dispersal.  Bear in mind that a professional liquidator is not only trained in the sale of assets but also has considerably experience in the field.  It’s important to take your time in selecting a liquidator.  Experience is critical but does not necessarily mean that the liquidator is good at what he or she does or is even right for your company.  Look for experience and results.  The best course of action would be to research the liquidators available in your area and to make a short list of the ones who seem the best suited to the liquidation of your company.  Once you’ve assembled an effective short list, take the time to call and interview the different liquidators to find the one that seems like the right fit for your company.  For example, a liquidator who specializes in the liquidation of companies similar to yours would probably be suited better to one that has no specialty.  The bottom line is that the right liquidator will be able to milk your assets for more money.

2.  Calculate the liquidation value. It’s important to have a good idea of what the assets of your company are worth before liquidation.  Bear in mind that during a forced liquidation, it is standard to expect around a 20 percent decrease in the retail value of assets.  Make a list of all of your company’s assets and calculate the value of everything combined.  The liquidator will do this as well but, whether you choose to hire one or not, it’s important to have a hand in and be aware of what you should be getting.

3. Choose the best time for sale. This is surprisingly overlooked by many companies going through the liquidation process.  The fact is, liquidation can be stressful and companies will try to get through it as quickly as possible.  This is just not a smart idea.  Make sure to sell assets at the best times in order to get the maximum return.

3 Inspirational Rags-To-Riches Stories

Although it seems like it would be nearly impossible for the average person to amass great wealth, these inspirational rags-to-riches stories show that the impossible may not be as far out of your reach as you believe. A number of the world’s billionaires managed to make their way from the bottom to the very top with sheer determination, solid will, and in many cases pure luck.

Guy Laliberté – Cirque du Soleil

Imagine having to make your living eating fire on street corners. Well that’s just how Canadian native Guy Laliberté, creator of Cirque du Soleil, got his start. Laliberté began his path to riches busking on the streets of Canada. He walked on stilts, played the accordion, and ate fire to entertain passersby. He finally took a gamble and brought a successful circus troupe from Quebec to the Los Angeles Arts Festival in 1987, going only on hope and faith that his move would pay off, because they didn’t even have return fare to get back home. The move paid off, and they were eventually taken to Las Vegas, where they became the world renowned hit that we know today as Cirque du Soleil. Laliberté is now worth $2.5 Billion as the CEO of Cirque du Soleil. He spends his time working as a professional poker player and enjoying his leisure time as a space tourist, which isn’t too bad for a guy that started out working for spare change on a street corner.

J.K. Rowling – Harry Potter Series

After the birth of her daughter in 1993, Rowling found herself divorced. She and her young daughter lived on welfare and struggled to make ends meet. While riding the train from Manchester to London, Rowling says that the idea for the story of the boy wizard Harry Potter came to her. After completing the first story it was repeatedly rejected by publishers, until a publisher finally bought the manuscript and paid her $4,000 for her story. By 2000 the first three books in the series had earned approximately $480 Million and sold over 35 million copies worldwide. Today, Rowling is worth an estimated $1 Billion, and there’s probably a number of publishers still kicking themselves.

Oprah Winfrey

Until the age of six, Winfrey lived with her grandmother and wore dresses made from potato sacks. She was molested by two family members until she finally ran away from home at the age of 13, and gave birth to a daughter that died soon after delivery at the age of 14. She returned home to live with her mother who soon sent her to live with her father. At this point Winfrey’s life finally turned around. She received a full scholarship to college and won a beauty pageant where she was discovered by a radio station. From there she went on to host talk shows, write books, and create the famous Oprah Winfrey Show. Winfrey built her very name into an unmatched empire, and according to Forbes she is now worth approximately $2.7 Billion.

The similarity between these 3 successful entrepreneurs is that at their most vulnerable moments, they were all down on their luck. They probably all struggled with debt and credit problems, and even if they tried to start a new business, they wouldn’t have been approved and equipped with the proper credit repair merchant account to help them out. But being persistent dreamers paid off. Today they can all look back at their early struggles and be proud of where life brought them.  It gives everyone hope, that success is possible at any stage of your life.

Boost Your Credit Score By Upto 80 Points With These Fast Credit Repair Tips

With the economy being like it is, it is understandable for you to get behind with your bill payments even if you never have before. Unfortunately, there is no such understanding with the credit reporting companies so your credit score will still be affected. Millions of other people are right there with you watching their credit score plummet as their chances of obtaining loans and credit cards dwindle.

So, what to do? Get some fast credit repair done on your credit score with these simple steps:

  1. Get a credit card

Don’t get caught up in the vicious debt cycle in the name of boosting your credit score! All you need is one (or maybe a maximum of two) credit cards to give your credit score that much needed boost.

You can either get a regular credit card or a secured credit. The advantage with the secured one is that the bank gives you a credit line based on how much you have in your account. That way, it is sort of like a debit card. The regular credit card on the other hand doesn’t subscribe to this policy so you will negotiate your credit line based on your credit score.

To make sure that you don’t dig yourself into another hole, read all the fine print. Avoid the high penalty interest rates and other fees by paying every month on time.

  1. Minimize the use of your credit card

Regardless of your faithful payments, you need to keep the use of your credit card as low as possible. The balances on your card account to a greater percentage of your credit score than your dutiful payment, such that the larger the balance on your card, the higher your credit score. Keep your utilization as low as 20% and your credit score will be fine.

This can be hard to do if you have more than one credit card but you can stay on top of it by:

  • Setting up email or text alerts to let you know when you are approaching your personal limit.
  • Shifting your credit between your cards to ease the burden on one e.g. moving your debt from the small balance-large limit card to the large balance-low limit card where it won’t have as much impact on your credit score. Just be careful not to overload one card.
  1. Get an installment loan for fast credit repair

Addition of good credit trade line accounts with concurrent deletion of even just one bad credit account can get your credit score up by as much as 80 points. Apart from a credit card, you can get an installment loan as a good credit account to give you that boost. An installment loans shows a sense of responsibility because you will be paying for it for some time.

Consider getting this loan from your local community bank or credit union. Such will most likely give you a better loan repayment package than a larger bank.

How to Triple Your Chances of Getting A Mortgage

Getting a mortgage is a huge time in a person’s life, but it’s never straight forward or easy. Securing a mortgage can take a lot of time and effort. It can also mean a lot of rejected attempts before you actually get accepted. This guide will help you to at least triple your chances of getting a mortgage, so you can be confident when you apply:

Your credit score plays a big part in getting a mortgage. If your score looks a little low, then there are a few things you can do to improve it. First of all, I suggest you make sure that there are no mistakes on your record. If there are mistakes on there, you need to sort them out ASAP so your record can be a true image of how you handle your finances. Mistakes do happen, so make sure you sort these out. You can then concentrate on other things that could be affecting your score, like outstanding debts.

Pay Off Any Outstanding Debts

As previously mentioned, outstanding debts can affect your credit score and won’t give a very reliable image of you to lenders. A person in debt isn’t likely to handle their finances well enough to pay off their mortgage each month, in their eyes. Before you start saving any money for your mortgage, pay off your outstanding debts and get back in the green.

Always Pay Your Bills On Time

By always paying your bills on time, you show the mortgage lender that you can handle your money well and will always pay your mortgage on time. One missed payment can make a big difference to an otherwise spotless record, so make sure you know when your bills are due to come out and that you have enough money behind you to pay them.

Close Any Bank Accounts You Don’t Use

Bank accounts you don’t use may seem harmless, but they can affect your credit score too! If there are any bank accounts that you don’t use at all or you could do without, make sure you close them ASAP. Don’t simply throw away the cards though; call the bank or go in and close them, or it won’t be official.

Avoid Living on the Edge of Credit

If you have credit and pay it off, that’s all well and good. However, if you are always on the edge of your credit, it will look to lenders as if you aren’t in control of your finances and are living beyond your means. Try to avoid going into your credit too much, even if you always pay it off on time.

Disassociate Yourself from People Who Bring You Down

You might not know it, but if you’ve ever shared a bank account with a person who has bad credit or doesn’t handle their finances well, they can bring you down too. You need to call the bank and ask them to disassociate you from these people; whether it was an ex partner or a friend you once shared a flat with.

Try the above tips, and you’ll stand a much better chance of securing that mortgage!

Dollars Up — How to Save Money When Traveling

Decide to travel and you’ve got flights, food and all those whimsical purchases to take into account. You want adventure but for less, so you need to save a few bucks here and there — as many as possible, in fact. Here are a few tips to help you rack up the savings so that you can invest in those enriching travel experiences.

On the way from A to B

You don’t want to take loads of suitcases and bags, so think about other options such as large rucksacks. Make the most of all the space and pack only the essentials so that you don’t have to check in and pay extra for excess baggage.

Consider when you’re flying. The more flexible that you can be regarding the dates, the more chance you have of saving money. Booking well in advance (or sometimes at the last minute) allows you to keep more of the holiday dollars in your pocket.

Think about who you’re flying with. Normally, it’s cheaper to buy a return ticket, but don’t automatically purchase one. Look into flying with different airlines. Some will be offering different prices for the same journey, creating opportunities to make a saving on both the outward and return journeys.

Cutting the expenses out and about

For all your thriftiness, you might not be able to resist that particularly cute lamp, ceramic bowl or even just a snazzy key ring. Choose your destination carefully, especially if you’re on a shopping trip. Eastern Europe, Africa and South America tend to be cheaper than Western Europe and North America.

If possible, you should also travel with a partner or companion. Traveling alone is no fun anyway, but if someone is joining you for the ride, you can halve the expenses. 

Filling small corners

Man can’t live by bread alone, but don’t eat out every single mealtime. In the more touristic areas you’ll probably pay over the odds for your meal, so head for the supermarkets and get some groceries. Opt for foods and drinks that are easy to open, such as screw-top bottled wine and canned food with ring pulls on, and only buy what you’ll realistically eat. Buying in smaller quantities also gives you the opportunity to sample local dishes and not miss out on one of the great things about travel.

Seeing the world is expensive, but when you’re travel- and financially savvy it can become suddenly much less so. You can start as you mean to go on, by saving before you even reach your destination. Then once you arrive, you can diminish the expenses and accumulate the experiences. Let’s roll!