Whilst the impact of the Charges and Governance Regulations on defined contribution pension plans is widely understood, the inconsistent approach to DC AVCs within defined benefit plans has caused some confusion. Unlike the requirements for a “value for money” assessment, chairperson’s statement and charge cap, which do not apply to plans where the only DC … Continue Reading
“Code of practice no. 13: Governance and administration of occupational defined contribution trust-based schemes” may not be the most imaginative of titles, but to coin a popular phrase, “It does what it says on the tin”. It also sets out a vast number of ‘expectations’ to be placed upon trustees – we have counted 126 … Continue Reading
What would be the effect of a Brexit on the UK pensions sector? The short answer is nobody really knows. Nobody can know, in fact, until the two-year exit negotiations have been concluded and, even then, one suspects that the nitty gritty detail will take years to work out thereafter. Let’s begin with what a … Continue Reading
In his eighth Budget as UK Chancellor, George Osborne resisted his radical impulses, apparently in the face of backbench opposition, to overturn pensions tax relief and left pensions alone. In July 2015 HM Treasury issued a consultation “Strengthening the incentive to save: a consultation on pensions tax relief” which prompted a massive reaction from the … Continue Reading
For those UK pension trustee boards out there who are incorporated (i.e. as a trustee company), from 6 April 2016 there will be a new requirement to keep a register of your “persons with significant control” (PSC). In addition, from 30 June 2016 this information will need to be delivered to Companies House where it … Continue Reading
As we explained in our July 2015 article, the UK State Second Pension, and contracting-out, will be abolished from 6 April 2016. As a result, employer and member national insurance contributions will increase for schemes currently contracted-out on a salary related basis. Employers who sponsor such schemes have the power to amend the scheme rules … Continue Reading
The first judicial review of a decision of the Pensions Regulator relating to UK auto-enrolment has been published. The High Court, in The Queen on the application of Fleet Maritime Services (Bermuda) Limited v The Pensions Regulator, considered the appropriate test for determining whether a worker “is working or ordinarily works in Great Britain under … Continue Reading
The Consumer Prices Index versus Retail Prices Index debate remains a live issue for many UK pension plans because of a material variation between rises in CPI and RPI which influences benefit cost. The Occupational Pensions (Revaluation) Order 2015 was laid before Parliament on 24 November, and sets the statutory revaluation rate for 2015 at … Continue Reading
The UK government has announced today probably the longest awaited policy change in the LGPS investment world, with a proposal to remove the limits on asset allocation that have been in place since the 1980s. The consultation proposes moving to a prudential supervisory regime of the kind which has operated well in the private sector, as … Continue Reading
You may remember that HMRC said they would issue further guidance on the VAT treatment of DB pension fund administration costs over the summer. Well, by my reckoning we are well and truly into autumn but HMRC have today published a new Brief. Has it resolved matters? In short (and, sadly) No. First, we have official … Continue Reading
On 21 October 2015 a new advertising campaign hit UK TV screens. Pensions Minister, Baroness Altmann, had a hand in designing the character “Workie” who features in the advert and is said to be the physical embodiment of the workplace pension. The aim of the joint DWP/Pensions Regulator campaign is to raise awareness of workplace … Continue Reading
It came as no great surprise last week when the Pensions Minister, Baroness Ros Altmann, announced that: “the time is not right to implement Defined Ambition, Collective Benefits and Automatic Transfers“. It is a case of too much too soon, but will there ever be a right time? The Government’s written statement clarifies its intention … Continue Reading
The UK’s National Association of Pension Funds (NAPF) has rebranded itself as the Pensions and Lifetime Savings Association (PLSA). Why the change? The PLSA says it better reflects changes to the way retirement provision is made, with people working longer and funding retirement in new ways, as well as having new rights to access their … Continue Reading
My school reports were always pretty good. I was, in fact, what was known as “a bit of a swot” in the 1980s. My friend, however, lacked enthusiasm. One year her physics report read: “Last year I said that [name] had reached rock bottom; this year, she has started to dig in.” We thought it … Continue Reading
Are you one of the 2,500 private sector employers operating a contracted-out pension plan? Or are you a trustee or an adviser to one of those pension plans? There is work to do if the sponsoring employer wishes to mitigate the effects of the increase to its National Insurance contributions from April 2016 when the … Continue Reading
By Sarah Gosling Whilst many IFAs and scheme administrators may be glad that pension input periods (“PIPs”) are being aligned with the tax year – the proposed transitional process to get them there may cause some serious headaches and prompt some rule amendments. It was announced in the Summer Budget that PIPs are to be … Continue Reading
Recently released IRS Notice 2015-49 will prohibit U.S. pension plan sponsors from offering lump sum payments to existing pensioners. Thus, for example, if an employer is going to do a lump sum “window”, existing pensioners could not be offered a lump sum. Nevertheless, it does appear that lump sums can still be offered to pensioners upon … Continue Reading
As widely trailed, the UK government has confirmed in the Summer Budget on 8 July that pensions tax relief for those earning more than £150,000 will be severely restricted from April 2016 – relief will be tapered to a minimum of £10,000 a year. In addition, the government announced that it is launching a consultation … Continue Reading
Whilst some smaller UK employers and new companies are yet to reach their pensions automatic enrolment staging date, the largest companies are in the process of planning for the first cycle of automatic re-enrolment. Companies can choose to re-enrol three months before the third anniversary of their staging date. For those that went first in … Continue Reading
A surplus arising in a UK pension plan probably seems less likely than England winning the cricket world cup! However, trustees of UK pension plans need to take action now if they wish to preserve the ability to repay surplus to the plan’s employers if and when such a surplus arises in the future. If … Continue Reading
Sometimes one or two words in a piece of legislation can stir up an entire industry. The catchily named Occupational Pension Schemes (Charges and Governance) Regulations 2015 have done just that with the new definition of “default arrangement”. Under new UK legislation applying from 6 April 2015, money purchase “default arrangements” are required to cap … Continue Reading
The “freedom and choice” reforms to UK pensions are giving individuals many more options in terms of how they access their pension savings. To ensure individuals make an informed choice, the accompanying legislation and guidance generally promotes the need for some form of financial advice to be obtained. Three examples of advice requirements have taken … Continue Reading
6 April 2015 is less than 2 weeks away and there is a huge amount of work to get done between now and then for everyone charged with operating a pension scheme in the UK. No-one is exempt. Although the bulk of the new flexibilities apply solely to DC benefits there are consequential changes affecting … Continue Reading
In M&G Polymers USA, LLC v. Tackett, the U.S. Supreme Court has opened the door for many employers to re-examine their ability to alter or amend retiree benefit plans. The Court rejected a long-standing presumption in the Sixth Circuit of the U.S. Court of Appeals (Michigan, Kentucky, Ohio and Tennessee) that retiree benefits in collective … Continue Reading
