Other personal finance news in brief

Redundancy rebates to be offset against tax

■ Companies owed money by the Government for employees whom they have had to let go will now be able to offset those sums against their tax bills. A recent agreement between the Revenue Commissioners and the Department of Enterprise, Trade and Employment will allow businesses to set overdue rebates for redundancy payments against money due for payment to the Revenue. The move, which has been welcomed by the Irish Taxation Institute, will provide some relief for business that are already under pressure and are now facing problems paying their tax liabilities because of cashflow delays in money owed by the State. Employers forced to make staff redundant can apply to the department for a refund of 60 per cent of the statutory lump sum payment. However, the department is struggling to cope with the backlog of applications that has arisen, according to the institute. At the same time, companies face pressure from the Revenue over prompt payment of tax liabilities. Late payments can result in interest bills from the Revenue or even enforcement action.

Hibernian Aviva’s 5% 15-month deposit rate

■ Hibernian Aviva has announced a new fixed rate deposit fund paying 5 per cent interest over 15 months. According to the company, that amounts to an annual equivalent rate of 4 per cent. The Aviva Ireland Fixed Rate Deposit Fund will invest client monies in an AIB fixed rate deposit account. The fund is designed to mature just as the state guarantee on bank deposits runs out in September 2010. Aviva says it will offer an extra 0.5 per cent allocation to those making investments of more than ¤25,000 by the end of this month. At the end of the term, the money will automatically switch into the Aviva Ireland Cash Fund unless investors request a move to another Hibernian Aviva fund. Aviva is pitching the fund at pension investors. Fund management charges of between 0.75 per cent and 1 per cent will apply as will “normal product charges”.

‘Agile pension decisions needed’

■ Pension funds need to be more agile in making investment decisions, according to the results of a survey carried out by benefits consultants Mercer. The company carried out the electronic survey at its recent European Investment Forum in Dublin. The event was attended by pension fund representatives, consultants and investment managers who were, between them, responsible for investment in excess of ¤1 trillion in pension fund money. More than eight out of 10 respondents felt the trustee governance model needed further development, with close to half (45 per cent) suggesting it could be improved by delegating some investment decision making externally – not too surprising given the make-up of the survey cohort. Other responses show that the industry still believes the

best investment opportunities will come, in ranking order,from equities, corporate bonds, commodities, property and hedge funds – despite the current move towards de-risking portfolios. There was also a harder line on active management of funds and the payment of fees on the basis of expected rather than actual outperformance.

Standard offering Rabo bank deposits

■ Standard Life is offering bank deposits as part of its Synergy pension and investment product. The company announced this week that it has teamed up with Dutch bank RaboDirect, offering pension fund investors access to Rabo’s 2 per cent AER variable rate demand deposit account and a range of fixed rates. Standard Life already offers the option of bank deposits with AIB, Bank of Ireland, Ulster Bank, Anglo Irish Bank and Bank of Scotland (Ireland). However, investors should be aware that in the event of default, they are covered by the UK’s Financial Services Compensation Scheme and not the Irish deposit protection regime or the Dutch deposit guarantee scheme. The British scheme covers 100 per cent of investments up to £2,000 and