Morgan Stanley is reportedly in talks with Wachovia about a possible merger.
Reports say discussions began on Wednesday when Wachovia’s chief executive, Robert Steel, called Morgan Stanley’s CEO, John Mack, to talk about a potential agreement. Since then, the talks are at a now formal stage.
Morgan Stanley’s stock has been battered over the past week. It closed at US$37.23 last Friday and fell as low as $11.70 on Thursday as a result of the worsening credit crisis and the bankruptcy of the company’s rival, Lehman Brothers.
For continuing coverage of the credit crisis, click here to visit our special section on the subject.
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Employers Should Give Near-Retirees DC Guidance
Employers in the United Kingdom could do a lot more to make sure that employees who are approaching retirement get the most from their defined contribution (DC) pension, according to Watson Wyatt.
The firm says that those close to retirement face an increasing and bewildering array of retirement income choices, and decisions made at or close to retirement can have a dramatic affect on their retirement income.
However, few employers provide education, advice or assistance to employees coming up to retirement.
“Unfortunately, many employees will not even be aware that they have important choices to make,” says Jackie Holmes, a senior consultant at Watson Wyatt. “Timely advice or guidance at this stage can provide a considerable boost to the value of the employee’s pension—and do much to enhance an employer’s brand.”
Employers would ideally start by providing some high-level awareness and education, moving into more detailed planning help as the employee gets closer to the point of retirement. This can be done through a mixture of online, paper and face-to-face communications.
“Employers invest considerable resources—contributions, administration and communications—into providing retirement income for their employees through DC pension schemes,” Holmes adds. “Pound for pound, providing timely advice or guidance for employees near to retirement age could prove very effective.”
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India’s Retirement Benefits Inadequate
A Mercer study finds that the largest companies in India, whether public or private, could do more to help secure adequate retirement benefits for their workforce.
In India, the issue may not be as immediate, and therefore may not have received the policy attention, that it is given in Japan, China, Korea, Europe and the United States.
The demographic composition of the workforce in India is younger than for many other major global economies. Thus, for many workers, retirement seems distant.
“When compared to employees in other large Asian economies such as China, Japan and Korea, the relatively younger workforce in India is yet to develop an adequate awareness of the importance of retirement savings”, says Vanessa Wang, Asia business leader, Mercer Retirement & Risk Consulting while commenting on the issue. “Coupled with the lack of public healthcare support and social security, the lack of adequate corporate retirement programs in India potentially may have adverse implications for India’s economic and social stability in the decades to come.”
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British Airways’ Pensions Sink
The funding position at British Airways’ two pension plans has deteriorated over the past year.
The New Airways Pension Scheme had a deficit of £1.5 billion (C$2.9 billion) at the end of March, up from £$1.3 billion (C$2.5 billion) a year ago. Its funded status fell to 83% from 90%.
The plan cited a cautious stance adopted by its money managers and an under-allocation to financials and long-term bonds for the weaker results.
And the Airways Pension Scheme reported a deficit of £240 million (C$486 million), reversing a surplus of £122 million (C$238 million). The funded status dropped to 96.5% from 102%.
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South Korea Promoted to Developed Status
An index provider has promoted South Korea to developed market status and will no longer be considered an emerging market.
The upgrade by FTSE Group is based on measures of the country’s wealth as well as good governance and transparency. The promotion will take effect next September.
South Korea’s stocks will make up 2% of the index provider’s developed market index. In FTSE’s emerging markets index, the country’s stocks made up 14.5% of the emerging markets index at the end of July.